Policymakers work on methods to continue subsidies on 'green' autos

BEIJING - China's State Council, or cabinet, is considering a development plan for new-energy vehicles, according to Su Bo, vice-minister of the Ministry of Industry and Information Technology.

"All relevant government agencies involved in drafting the plan had a high level of agreement on the plan," Su said at an auto industry conference in Tianjin on Saturday. He didn't give details on when the plan will be approved or the measures proposed.

A new-energy car at an industry exhibition in Beijing. Several ministries are joining hands in an effort to improve subsidy policies to help growth of the new category of vehicles in China. [Photo/China Daily]

The industry and finance ministries, together with the National Development and Reform Commission (NDRC), the nation's top economic policymaking agency, are also working to continue a subsidy program for energy-saving vehicles and will increase the qualifying threshold, Su said.

China is encouraging the development of alternative-energy automobiles to reduce emissions and fuel imports. The government aims to have 1 million electric-powered vehicles running on roads by 2015, according to the Ministry of Science.

The finance ministry may lower taxes on new-energy vehicles and key components as part of efforts to develop the industry, Wang Wei, director of the ministry's tariff department, said at the same forum on Saturday.

"There is no doubt that developing electric vehicles is the common goal for automakers and the government has been encouraging automakers to do so," said Zhang Xin, an auto analyst with Guotai Junan Securities Co in Beijing. "Consumers will make the ultimate call as to whether electric vehicles can beat traditional fossil fuel-powered vehicles and hybrids."

China's auto sales growth will slow to about 3 percent to 5 percent this year after government incentives that boosted deliveries in 2010 were removed, according to State Information Center Research Director Xu Changming.

Deliveries will likely be about 19 million units this year, according to Xu, whose center is a unit of the NDRC.

"The third quarter may be better than the second as September and October are traditionally hot seasons for auto sales, but I don't expect a big improvement," Xu said in an interview at the forum. "I don't expect any more stimulus policies from the government in the near future."

China's auto sales have slowed this year after surging 32 percent in 2010 to a record, as the government phased out sales-tax breaks and rebates for rural purchases. Total vehicle deliveries expanded 3.2 percent in the first seven months, according to the China Association of Automobile Manufacturers.

Xu's forecast is in line with the auto association, which lowered its previous estimated 10 percent to 15 percent growth this year to about 5 percent in July.

The State Information Center is conducting research on consumer acceptance of electric vehicles to see whether and under what circumstances buyers will opt for the alternative-energy cars, he said.

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