Car technology upgrade supported by 620 mil CNY policy-related subsidy in China

At present, companies such as JAC, GAC and Foton have announced subsidy obtained from government. According to incomplete statistics, subsidy allocated by government is as much as 620 million CNY, which equal to 99 million dollars in the first half this year. From the perspective of range covered by subsidy, it mainly aims new energy project or technology research area. It points out that auto companies, which are the pillar industry for local government, enjoy many kinds of subsidy for a long time. At present, China owned auto companies are at the bottle neck period. Local government speeds to help China owned companies. However, support from government may works opposite, which becomes capital resource for less competitive auto companies.

Last week, JAC publishes . It says that according to relative policy, receiving 72.82 million CNY (equal to 11.69 million dollar) from Hefei government for energy saving and new energy auto development and demonstration. JAC says the fund allocated because of the company new energy auto research investment.

GAC Group has announced that GAC Jiao, which is held by GAC Group, has received confirm letter from government of economy area development commission of Dongying, which will support 300 million, which equal to 48 million dollars, for GA series research of GAC Jiao.

Foton of Beijing Auto has published 2 announcement concerned about government subsidy. It says that Foton obtains “special fund for middle and small sized enterprises” of Ministry of Finance of Changping Government, which amounts to 71.18 million CNY, which equal to 11.43 million dollars. Besides, the company has received up to 3.24 million CNY (equal to 520 thousand dollars) from government since April 26 this year. Just in this April, Foton is awarded 24 million dollars for “project of special production base of Huairou of Beijing Auto- Foton” according to policy supporting technology development of year 2014. The company has received subsidy of 4.59 million dollars from government since this year.

Besides, according to the finance report of BYD for the first reason, government subsidy in report for the first 3 months this year is 15.74 million dollars.

According to the 3rd part institution, there are 22 listed companies in China have obtained 897 million dollars from government. The figure has increased 16% over year 2012, and 100% over year 2011.