China today announced that 71 cars have been approved for fuel-efficient subsidies as it promotes greener vehicles to address pollution and energy security.
The first batch of green vehicles are made by 16 Chinese car makers including BYD Automobile Ltd, and Chongqing Chang'an Automobile Co, as well as joint ventures of Hyundai Motor Corp and General Motors Corp, according to the National Development and Reform Commission.
The top economic planning body said these vehicles, with engine capacity of 1.6-liters or less, will be granted 3,000 yuan subsidy per car after proving they can save fuel consumption by at least 20 percent.
After beating the United States as the world's largest auto market last year, China has encouraged car makers to roll out more green vehicles in a bid to boost industrial restructuring and leapfrog Japanese and Western rivals.
Industrial analysts said the subsidies, aiming to popularize fuel-efficient vehicles that usually cost more, will make green models more price competitive.
BYD Co, backed by billionaire Warren Buffett, said its F0 subcompact car is eligible for the subsidies and Shanghai Volkswagen said the subsidy is also likely to cover its 1.4-liter turbo engine models.
However, some car makers said they are still waiting for the government to release more detailed information.
"We are still not clear on how we collect the subsidies from the government," said an official from Shanghai General Motors Corp.
"Also we are not sure whether the subsidies would be given in terms of the production capacity or sales," he said.
China wants to have 500,000 green vehicles including hybrids and electric cars on its streets by 2011. The government also announced it would offer subsidies up to 60,000 yuan for plug-in hybrid and electric car producers on June 1.
It is estimated that those subsidies would spur vehicle sales by more than 4 million units by 2012.
