China rolls out new measures to spur car sales

Credit: REUTERS/CHINA STRINGER NETWORK

China said on Thursday it is stopping local governments from imposing new restrictions on car purchases and cancelling existing ones that apply to new energy vehicles, as it looks to spur consumption amid a slowing economy.

By Yilei Sun and Brenda Goh

BEIJING, June 6 (Reuters) - China said on Thursday it is stopping local governments from imposing new restrictions on car purchases and cancelling existing ones that apply to new energy vehicles, as it looks to spur consumption amid a slowing economy.

The National Development and Reform Commission (NDRC) said in a statement, which applies to the 2019-2020 time period, that support would also be rolled out to encourage car purchases in the country's rural areas.

It also called for more local governments to allow pickup trucks to enter their cities, in order to widen the vehicle's usage.

The moves "strive to break the market barriers that restrict consumption and protect consumers' legitimate interests," the NDRC said.

Shares in Hong Kong-listed Geely Automobile Holdings 0175.HK rose by more than 3% after the announcement, which was made after mainland markets shut. The Hong Kong-listed shares of BYD Co Ltd 1211.HK climbed as much as 5.2%.

Auto sales in China, the world's largest car market, contracted for the first time last year since the 1990s but executives have said that they expect the market to return to growth this year thanks to government support.

(Reporting by Yilei Sun and Brenda Goh; Editing by Muralikumar Anantharaman)

((brenda.goh@thomsonreuters.com; +86 (0) 21 6104 1763; Reuters Messaging: brenda.goh.thomsonreuters.com@reuters.net))

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