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In the third round of policy support for commercial vehicles, the "new for trade" subsidy has been increased by 4 billion yuan to make the process more consumer-friendly. More details can be found at http://auto.nfdaily.cn. The increase from 1 billion to 5 billion yuan is a significant boost that offers real benefits for commercial vehicle owners. After the first announcement, industry insiders like Dong Zean, head of GAC Hino Sales, expressed excitement: “We’ve been waiting for this opportunity for months.” According to a decision made by the State Council's executive meeting, commercial vehicle owners who have obtained their original vehicle scrapping certificate may now qualify for a subsidy not exceeding the purchase tax of the same type of vehicle. This move aims to encourage the replacement of older, less efficient models with newer, cleaner alternatives. In the first four months of this year, commercial vehicle sales saw a strong upward trend, and these new policies are expected to further accelerate growth. However, some car manufacturers are calling for clearer guidelines and simplified procedures to ensure that programs like "renewal of old" and "cars to the countryside" can be implemented more effectively. The expanded subsidies are anticipated to quickly boost sales. This year, the central government will raise retirement subsidies for old cars from 1 billion to 5 billion yuan. Additionally, the "old-to-new" replacement program will be broadened, offering additional financial incentives for vehicles that meet specific service life requirements. Medium, light, and micro-duty trucks, as well as certain medium-sized passenger vehicles, that are prematurely scrapped and replaced with new models, or those that fail to meet national emission standards, will be eligible for subsidies up to the amount of the single vehicle purchase tax. Dong Zean of GAC Hino believes the increased support will attract many consumers to upgrade their vehicles, leading to a short-term sales surge. Local dealers also plan to intensify marketing efforts in response to the favorable policy environment. Despite the positive outlook, some industry players feel that the supporting rules need improvement. According to analyst Jia Xinguang, previous government efforts in promoting vehicle retirement were insufficient. With about 26 million commercial vehicles on China’s roads, and only 300,000 to 500,000 scrapped annually, the current scrap rate is just 2%. This means there are millions of outdated vehicles still in use. Increasing the intensity of scrapping policies can help reduce pollution, improve safety, and enhance transportation efficiency. Jia also pointed out that while policy support and improved infrastructure are important, the real key to boosting the commercial vehicle market lies in better implementation of the vehicle renewal and scrapping policy. Some car companies are urging the government to speed up the release of detailed subsidy plans and make them more accessible to consumers. One company representative suggested that the scrapping and replacement process should be streamlined, similar to how passenger car purchase tax relief is handled. This marks the third time the government has introduced policy support for commercial vehicles, following the "Cars Go to the Countryside" initiative in March and the increased retirement subsidies in April. The focus on commercial vehicles reflects their sluggish performance compared to passenger cars. According to data from the China Association of Automobile Manufacturers, while passenger car sales hit record highs in the first four months of the year, commercial vehicle sales remained weak. For example, truck production and sales in January to April 2009 were 743,100 and 719,700 units, respectively, showing modest growth. In contrast, semi-trailer tractor sales dropped significantly, and non-integrated truck sales also declined sharply. With this latest policy push, Jia Xinguang believes commercial vehicle sales will see a notable rebound.

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