China's new round of consumer goods trade-ins has achieved positive initial results in the country's auto industry over the past two months, raising market confidence that successful revival of consumption will offer stronger impetus to the economy.
As of June 25, the Ministry of Commerce received a total of 113,000 subsidy applications for vehicle trade-ins and is witnessing a rapid surge in new applications.
"It took around 20 days to go from the first to the 10,000 applications and only seven days to receive another 10,000 applications. Then, the number of applications surged to 30,000 within a span of four days. This trend shows that consumers are gradually embracing the idea of exchanging their old belongings for new ones," said Wang Du, assistant to the chairman of the China Automobile Dealers Association.
Experts stated that the auto sector is a key pillar of the national consumer spending and a concentrated period of potential demand for vehicle renewals and replacements has emerged, as the last such round of consumer goods trade-ins took place nearly 15 years ago.
"This time, the central and local governments will jointly allocate a total of 16 billion yuan (around 2.2 billion U.S. dollars) throughout the year to offer subsidies for scrapping old vehicles and facilitating the purchase of new ones," added Wang.
As the government advances this program, car sales have continued to rise in China, the world's largest auto market. In May, the retail sales of cars exceeded 2.27 million units, up 8.7 percent year on year, while the sales of new energy passenger vehicles soared 38.5 percent, data showed.
China's trade-in program stimulates vitality in auto industry
