China's government is planning a range of measures – including subsidies for car purchase – as it seeks to stimulate the country's slowing economy.
According to Reuters, the National Development and Reform Commission (NDRC) in Beijing has said said restrictions will be loosened on the second-hand auto market, and that 'appropriate' subsidies will be provided to boost rural sales of some vehicles and purchases of new energy vehicles.
Vehicle sales in China posted an annual decline in 2018 for the first time since 1990, sending alarm bells ringing as China's economy also feels the negative impacts of a trade war with the US.
The focus of new measures "is not simply to increase the consumption of large cars, but also to integrate the industrial transformation and upgrading of consumption," Liu Yunan, an NDRC official, told a news conference, Reuters reported.
The report added that Wang Bin, deputy director of market operations at the Commerce Ministry, said in the long-term auto sales "are still the main factor driving consumption growth".
The NDRC also reportedly said it would accelerate the launch of commercial licences for 5G, the next generation wireless technology that could boost vehicle connectivity.
China's economy – the world's second largest, after the US – grew at just 6.6% in 2018, according to official figures. Some analysts maintain that China's economy needs to grow close to 8% pa in order to maintain employment levels. China is already having to deal with lower property prices and high levels of domestic debt. The automotive sector is seen as key driver of China's economic growth and softer demand in the world's largest car market has already dented the bottom lines of international car companies.