Beijing has renewed a trade-in subsidy for car purchases, at least a week ahead of schedule, in an apparent effort to prop up the country’s automotive sector amid worries of a sales slump in 2026.
Buyers who replace their petrol and electric cars with new vehicles would receive a cash subsidy of up to 20,000 yuan (US$2,858) per unit, according to a circular jointly released on Monday by the National Development and Reform Commission and the Ministry of Finance.
The authorities were earlier expected to announce the subsidy’s extension in early or mid-January.
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Monday’s announcement was seen as a response to bearish forecasts of lacklustre car sales in 2026 owing to persistent deflationary pressure.
“Renewed subsidies may not be enough to stop a sales decline, but the policy shows the authorities’ willingness to further spur the automotive market,” said Tian Maowei, a sales manager at Yiyou Auto Service in Shanghai. “Technically, carmakers and dealers would need to offer price cuts to keep their cars attractive to customers.”
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Buyers of an electric vehicle (EV) for replacement purposes would get a subsidy equivalent to 12 per cent of the newly bought car’s price, which is capped at 20,000 yuan, according to the circular.