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Business Times
18-06-2025
- Automotive
- Business Times
China car trade-in subsidy halted in some areas as funds run low
[HONG KONG] China's trade-in subsidy to boost sales of electric and fuel-efficient vehicles has been suspended in key cities across at least six provinces as funds run short and officials scrutinise the prevalence of 'zero-mileage' used cars. Cities in provinces including Guangdong, Henan and Zhejiang have suspended the programme, which gives consumers up to 20,000 yuan (S$2,780) towards the purchase of a newer model car and had been scheduled to run until the end of this year, according to reports from local media including Dahe Daily. The practice of dealers and traders purchasing new cars in bulk, registering them in order to qualify for rebates, then selling them on the used-car market without ever being driven has added to fiscal pressures and led to probes by authorities, the reports said. Regulators are studying ways to prevent such practices and ensure proper fiscal allocations before continuing to support auto consumption, the Dahe Daily reported, citing people it did not identify. The cash-for-clunkers programme, part of a broader trade-in package aimed at boosting retail sales to support a weakening Chinese economy, has been an important pillar for the nation's car sales. About 70 per cent of personal car purchases in May utilised the trade-in subsidy, broadly in line with the figure for April, according to data from the China Passenger Car Association. The pause to the programme adds to growing challenges facing automakers in the world's largest car market. The industry has found itself under growing scrutiny after an extended price war caught the attention of authorities. That includes the Ministry of Industry and Information Technology which, along with two other agencies, convened a meeting with 17 major Chinese automakers in early June to address issues including 'zero-mileage' used cars, Bloomberg News has previously reported. 'These cars came under scrutiny as they're considered a tactic to fraudulently claim the subsidy,' Li Yanwei, an adviser to the China Automobile Dealers Association, said. Guangdong and Jiangsu provinces started to strengthen the verification of second-hand car sales in May, he said. Some provinces paused their subsidy programmes in June, and are re-assessing cars that have had multiple ownership transfers within a short period of time, according to Li. By the end of May, there had been more than 4.12 million applications for the vehicle trade-in subsidy, according to the Ministry of Commerce. BLOOMBERG
Mint
18-06-2025
- Automotive
- Mint
China Car Trade-In Subsidy Halted in Some Areas as Funds Run Low
China's trade-in subsidy to boost sales of electric and fuel-efficient vehicles has been suspended in key cities across at least six provinces as funds run short and officials scrutinize the prevalence of 'zero-mileage' used cars. Cities in provinces including Guangdong, Henan and Zhejiang have suspended the program, which gives consumers up to 20,000 yuan toward the purchase of a newer model car and had been scheduled to run until the end of this year, according to reports from local media including Dahe Daily. The practice of dealers and traders purchasing new cars in bulk, registering them in order to qualify for rebates, then selling them on the used-car market without ever being driven has added to fiscal pressures and led to probes by authorities, the reports said. Regulators are studying ways to prevent such practices and ensure proper fiscal allocations before continuing to support auto consumption, the Dahe Daily reported, citing people it didn't identify. The cash-for-clunkers program, part of a broader trade-in package aimed at boosting retail sales to support a weakening Chinese economy, has been an important pillar for the nation's car sales. About 70% of personal car purchases in May utilized the trade-in subsidy, broadly in line with the figure for April, according to data from the China Passenger Car Association. The pause to the program adds to growing challenges facing automakers in the world's largest car market. The industry has found itself under growing scrutiny after an extended price war caught the attention of authorities. That includes the Ministry of Industry and Information Technology which, along with two other agencies, convened a meeting with 17 major Chinese automakers in early June to address issues including 'zero-mileage' used cars, Bloomberg News has previously reported. 'These cars came under scrutiny as they're considered a tactic to fraudulently claim the subsidy,' Li Yanwei, an adviser to the China Automobile Dealers Association, said in an interview. Guangdong and Jiangsu provinces started to strengthen the verification of second-hand car sales in May, he said. Some provinces paused their subsidy programs in June, and are re-assessing cars that have had multiple ownership transfers within a short period of time, according to Li. By the end of May, there had been more than 4.12 million applications for the vehicle trade-in subsidy, according to the Ministry of Commerce. This article was generated from an automated news agency feed without modifications to text.
Bloomberg
27-05-2025
- Automotive
- Bloomberg
China Summons Top Carmakers Over ‘Zero-Mileage' Used Vehicles
China's Ministry of Commerce is meeting with some of the country's biggest automakers to discuss whether the industry is using a loophole to mask weakening sales. The meeting, which was set to take place Tuesday afternoon, also included industry bodies such as the China Automobile Dealers Association and online car distribution channels, according to a memo shared by Li Yanwei, an official at the dealers' association, on Weibo.
Yahoo
26-05-2025
- Automotive
- Yahoo
Chinese EV Makers Slash Prices as Competition Heats Up
Shares in Chinese electric vehicle (EV) makers slumped on Monday despite surging interest from UK buyers, as industry titan BY introduced a round of new price cuts in an already bruising market battle. Hong-Kong listed BYD dropped as much as 8.25 per cent from a record high set last week, after an announcement over the weekend slashing prices on 22 electric and plug-in hybrid models. The steepest cut, a 34 per cent discount, was applied to one plug-in hybrid. This reduced the model's price by RMB 53,000 (£5,423) to RMB 102,800 (£10,519). Other Chinese automakers followed suit, with state-backed Changan offering a 15 per cent discount on one of its SUVs, while Stellantis-backed Leapmotor also cut prices by up to 30 per cent on some models. The aggressive discounting, part of BYD's 'fixed price' campaign running until the end of next month, is expected to lift the firm's second-quarter vehicle shipments by up to 30 per cent, according to Citi analysts. Still, this growth comes at the cost of profitability, with BYD's estimated net profit per vehicle for the quarter falling short of its full year target. Smaller rivals with weaker balance sheets now face a tough choice to either cut prices and bleed, or lose market share. 'BYD holds significant pricing power in the market, so each round of its price cuts is set to prompt other car brands to follow suit', said Li Yanwei of the China Automobile Dealers Association. Even as competition heats up overseas, Chinese EV brands are gaining serious traction on home soil. New data from Auto Trader shows a surge in consumer interest, with over 1.4m views on listings for Chinese EVs in the first four months of this year, up from 1.3 per cent of total views a year earlier, to 5.3 per cent now. BYD accounted for half of all Chinese EV traffic on the platform. Ian Plummer, commercial director at Auto Trader, said: 'Our research shows a breakthrough for Chinese manufacturers in the UK market over the last 12 months. Chinese electric vehicles are cutting-edge products, backed by affordable battery technology'. While Chinese EV makers flood the market with affordable options, Britain is doubling down on its own green strategy. Prime Minister Keir Starmer's recently announced £2.3bn package aims to bolster domestic EV manufacturing and infrastructure, confirming a 2030 ban on new petrol and diesel cars, while offering regulatory flexibility and tax incentives. While US president Donald Trump imposing steep tariffs on foreign-made vehicles, and the EU considering similar measures, the UK could become an increasingly attractive destination for Chinese exports. 'Trade turbulence with the US and EU tariffs is also making the UK relatively more attractive as a market', added Plummer. 'There will be much more to come from the Chinese carmakers'. The UK's EV sales rose over 40 per cent in March, cementing its place as Europe's largest and the world's largest EV market. 'This is about future proofing British industry', said Starmer. 'And delivering change that actually works for working people'. By City AM More Top Reads From this article on Sign in to access your portfolio
Business Recorder
08-05-2025
- Automotive
- Business Recorder
China carmaker Geely shares rise nearly 7% after Zeekr unit offer
HONG KONG: Shares of Chinese automaker Geely Automobile jumped nearly 7% on Thursday after it offered to pay $2.2 billion to privatise its unit Zeekr, just a year after it took the electric vehicle brand public in the United States. Geely's shares rose as much as 6.7% in early trade to HK$17.90 ($2.30). Geely offered to pay $25.66 in case or 12.3 in newly issued shares per Zeekr's American Depositary Share, a premium of 13.6% to the stock's closing price on Tuesday. 'This appears an opportunistic proposal,' said David Blennerhassett, content strategist at financial services firm Ballingal Investment Advisors who publishes on SmartKarma, adding that Geely had almost sufficient votes to take Zeekr private given its 65.7% stake in the firm. 'Geely already controls and consolidates Zeekr, so the impact, if any, will come from the cost outlayed for shares not held - which could be largely mitigated under the scrip option.' Geely said it wanted to consolidate its business to fend off fierce competition in China's largest auto market. The company, which owns multiple brands including Volvo, has been pivoting away from its history of aggressive acquisitions to streamlining operations and cutting costs. Zeekr, which was founded in 2021 as a premium electric vehicle brand of Geely, went public in the US in May last year at a valuation of $6.8 billion, the first major listing by a Chinese company in the country since 2021. But investor concerns over whether Chinese companies could be forced to delist US exchanges have reemerged since the tit-for-tat trade war between the world's two largest economies. Zeekr was named in a letter by two Republican lawmakers to the US Securities and Exchange Commission that called for 25 Chinese companies to be delisted from US exchanges, saying they had military links that put US national security at risk. Zeekr did not respond to a request for comment on the letter. Li Yanwei, analyst at the China Auto Dealers Association, said that privatising Zeekr was the best choice for both companies at the moment given multiple headwinds, such as slower than expected sales for Zeekr's new products such as the 7X and US-China tensions. China's Geely Holding targets over 5 million units of annual sales by 2027 The Trump administration has also imposed tariffs on imports of Chinese EVs, blocking in essence Zeekr from selling in the US 'The capital market is less enthusiastic about Chinese new energy vehicle companies, and the possibility of refinancing in the US capital market is much lower,' he said.
