Jilin province implements subsidy policy for new purchases of FAW Group own brand vehicles

Sales of own brand vehicles have been in a fall since the beginning of this year, causing Chinese automobile enterprises to lose a good deal of their market share. In order to aid domestic manufacturers, the province of Jilin is implementing subsidies for purchases of new FAW own brand cars, International Finance News reported today. The subsidies, which can reach a maximum of 30,000 yuan ($4,739) per vehicle, are based on policies recently introduced in the province's capital Changchun.

The policy will especially help the province's farmers and fishermen, who will be able to gain a discount of ten percent off new FAW commercial vehicles. The subsidy policy will remain in effect until the end of this year.

"This subsidy is good news and will be of great help to FAW's own brands," FAW Group Spokeswoman Shao Xin remarked in an interview with International Finance News. "However," she added, "as the policy has only recently been introduced, it is hard to determine what exact effect it will have on FAW Group's sales." Beijing Yayuncun Automobile Trade Market General Manager Chi Yifeng agreed with the positive effects of the subsidy, saying that such policies should noticeably influence the regional sales of the manufacturers they are targeted at.

However, the subsidy also has its fair number of detractors. A Great Wall official voiced his displeasure, saying that local subsidies should follow the standards and guidelines set used for national policies, which are formulated in order to ensure equality between potential recipients. He added that while such policies may help enterprises in the short-term, they are still not as useful as cultivating independent research and development ability in the industry.

FAW Car, which includes Besturn and FAW Mazda, has seen its sales drop 35.5 percent over the first six months of the year. Decreasing prices have further reduced the manufacturer's net profits, which are now in the red.