Rural subsidies for autos, appliances 'likely'

BEIJING -- Authorities are expected to kick off another round of subsidies to boost car and home appliance sales in rural areas, according to Wednesday media reports.

Authorities are considering expanding coverage for fiscal subsidies to autos sold in rural areas, the China Securities Journal quoted industrial insiders as saying.

Cars with a displacement under 1.3 liters and heavy-duty trucks will be included in the preferential package, which offered one-off subsidies for purchases of mini-buses with a displacement of less than 1.3 liters and small trucks.

Home appliances, especially small and medium-sized ones, will likely get subsidy support around the end of the year, according to sources close to the Ministry of Commerce, or MOC.

Large and durable home appliances, such as TV sets, refrigerators and air conditioners, are likely to be excluded.

China first launched subsidy campaigns to boost home appliance sales in rural areas in 2007. The first round will expire in January 2013.

Appliance sales were spurred by the incentive policy, with sales revenues rising 21.8 percent year-on-year to 136.32 billion yuan ($21.48 billion) in the first eight months of 2012, MOC data showed.

Data from the National Bureau of Statistics showed that sales revenue growth in rural areas has surpassed that of cities since April, as rural residents with increasing incomes are consuming more than before.

The appetite for autos in rural areas is large, as auto ownership in these areas is relatively low, analysts said. The auto industry is expected to make efforts to boost the domestic market amid sagging external demand.

Prompted by the news, shares of companies in the auto and home appliance sectors responded positively on Tuesday.