China to adjust rules on subsidies

China will introduce new rules on subsidies for energy efficient vehicles. According to a Bloomberg report, China’s Ministry of Finance said that only cars that have five or fewer seats will qualify for the 3,000 yuan (US$470) subsidy, as long as the vehicle’s fuel consumption is less than or equal to 6.3 liters for every 100 kilometers (km); and the total body weight should be between 1,205 and 1,320 kg. Implementation of the new rules will significantly reduce the number of vehicles that will qualify for the subsidy, and will increase competition in a market that has been exhibiting slow growth. Local automakers will be hit the most because they may not be able to compete with international joint ventures. (September 20, 2011)