Chinese stimulus plan supports local brands

An economic stimulus plan introduced by the Chinese government for the automotive industry aims to support local proprietary brands, as it wants China’s auto industry to no longer be dominated by joint ventures. Pursuant to this plan, Chinese joint ventures expect an average sales growth of below 10% while domestic manufacturers predict double-digit growth in 2009. The Chinese government announced earlier that it has set aside RMB5 billion (US$732.50 million) to subsidize rural customers’ purchase of light-duty trucks or mini-cars with engine displacements below 1.3 liters. A RMB10 billion (US$1.46 billion) fund will be established to help domestic manufacturers research and develop renewable energy-reliant vehicles and produce auto parts. Bus and taxi producers, such as Zhengzhou Yutong Bus Co. Ltd., Xiamen KLM Motor Group Co. and SAIC Motor Corp. Ltd. will be prioritized. (February 13, 2009)