Buses to Benefit Little from New Subsidy Policy
22 May 2009
On May 19, 2009, the state council held its regular meeting and hammered out new incentives to encourage commercial vehicle replacement.
In early this year, the central government rolled out a host of measures to reverse the declining trend of the auto industry. However, the major beneficiaries of the favorable policies are passenger vehicle makers. The commercial vehicle sector, however, failed to show any signs of recovery in the first four months.
Against this backdrop, the state council decided to introduce new incentives to drag the commercial vehicle manufacturers out of the current dire situation.
However, a closer look at the current CV market indicates that over 90% of the CV fleet is comprised of cargo trucks while the rest of it is buses & coaches. Moreover, the light-duty buses & coaches, taking up the majority, are not among the beneficiaries while the medium-sized buses, which are expected to receive subsidies from the government, only account for about 15% of the total bus fleet in China. Given above, bus & coach builders still can hardly expect any bright prospects in the near future.
It also has to be noted that the new incentives require the CV owners or operators to replace their old vehicles with the new ones. Only after these people have found very compelling reasons for them to make such a replacement move, manufacturers of medium-sized buses are going to reap benefits. As it is stipulated that the subsidies from the government for each vehicle should below the tax on buying it, the financial supports offered by the government can hardly be regarded as attractive. Under the current economic climate, customers are all quite prudent in their spending. Given above, how large impact can the new incentives have on the CV sector, esp. the bus & coach industry, is yet to be seen.
Source : english.chinabuses.com
Editor : Mark
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