China Asks for Comment on Car Subsidies

By PATRICIA JIAYI HO

BEIJING -- China is seeking comment from the public about its subsidy program aimed at encouraging consumers to replace old and polluting vehicles with new autos, the finance and commerce ministries said.
Consumers who scrap vehicles under the plan can receive a subsidy of between 3,000 yuan and 6,000 yuan, or about $450 to $900, when they purchase a new vehicle. Applicants must deliver their old cars to special scrapping centers.
The size of the subsidy would depend on the model of the scrapped vehicle, the Commerce Ministry said on its Web site Friday. It is seeking comment about the subsidy program until Friday.
The subsidy program comes as China's auto sales have risen steadily even as global auto demand has cooled amid the financial crisis.
Analysts attributed strong car sales in China, which rose 14.3% in the first five months of this year from a year earlier, to government policies, including a purchase tax cut on small vehicles with engines 1.6 liters or smaller in January.
Consumers who scrap autos that don't meet emissions standards and replace them with vehicles that have engines 1.6 liters or smaller aren't eligible for the subsidy, because they already enjoy 50% off the purchase tax, the statement said.
The subsidies will be offered until May 31, it said.
Write to Patricia Jiayi Ho at patricia.ho@dowjones.com