China’s $1.56 Billion Consumer Subsidies See Surge in Sales of Cars and Household Goods

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Consumers look at cars at a dealership in Dongying, Shandong province, on June 20, 2024.

China has already approved nearly 11 billion yuan ($1.56 billion) in subsidies through the national automobile trade-in platform, helping drive sales of cars and home appliances, an official at the National Development and Reform Commission (NDRC) said at a press conference Wednesday.

The subsidies are part of a 300-billion-yuan ($41 billion) stimulus program designed to increase consumption. The NDRC and the Ministry of Finance issued guidelines in July to support the renewal of large-scale equipment and the replacement of old consumer goods with new ones, generating the funds by selling ultra-long-term special government bonds.

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China approved nearly 11 billion yuan in subsidies for automobile and home appliance sales as part of a 300-billion-yuan stimulus program.
Trade-in subsidies offer up to 20,000 yuan for new energy vehicles and up to 20% off for new home appliances, boosting August NEV sales by 17% and leading to significant home appliance sales increases.
Over 3.86 million people benefited from the subsidies, which are set to expire on December 31, with unused funds to be returned to the central government.

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Who’s Who

China Automobile Dealers Association: The China Automobile Dealers Association provided data indicating a positive sales trend. In August, passenger car sales increased by 10.8% month-on-month, with NEV sales growing by 17%. This continued in September, with passenger vehicle retail sales up 10% from the previous month and NEV sales up 7%. The association also noted a 42.4% rise in scrapped vehicles in the first eight months, accelerating since the subsidy program began in May.

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What Happened When

April 2024：: Sales revenue for refrigerators and televisions grew by 2.4% and sales of TVs grew by 5%. Furniture and bathroom ware saw even larger gains, with retail revenue rising 8.9% and 12%.

May 2024：: Growth in scrapped vehicles accelerated since the subsidy program kicked in.

July 2024：: The NDRC and the Ministry of Finance issued guidelines to support the renewal of large-scale equipment and the replacement of old consumer goods with new ones.

By August 2024：: Sales revenue for refrigerators and televisions grew by 2.4%, and sales of TVs grew by 5%. Furniture and bathroom ware saw retail revenue rise by 8.9% and 12%.

August 2024：: Half of the fund allocated to local governments is earmarked to help people replace old, worn-out consumer goods.

August 2024：: Passenger car sales grew by 10.8% month-on-month, with new NEV sales increasing by 17%.

Between September 2, 2024, and September 15, 2024：: Sales of energy-efficient appliances, including refrigerators and washing machines, rose dramatically, with some products such as TVs surging by over 220%.

September 2024：: Passenger vehicle retail sales increased by 10% from the previous month, while NEV sales grew 7%.

By September 24, 2024：: More than 1.13 million applications for vehicle trade-in subsidies had been received.

September 24, 2024：: The national automobile trade-in platform had more than 1.68 million registered users.

As of Tuesday, September 24, 2024：: More than 1.13 million applications for vehicle trade-in subsidies had been received and the national automobile trade-in platform now had more than 1.68 million registered users.

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