Multiple provinces in China are reining in vehicle trade-in subsidies, dealing a blow to auto sales and casting doubt on the durability of the national stimulus program, reports Caixin. On Sept. 4, the Department of Commerce in Hubei province said it was cutting auto trade-in incentives to two levels—RMB 3,000 ($411) and RMB 5,000—from a previous range of RMB 7,000 to RMB 15,000.
The application process has also become more complex. Starting Sept. 5, buyers must obtain an eligibility voucher before purchasing a new car. The provincial platform releases a limited number of vouchers daily, with volume adjusted according to fund usage. The tighter policy has led some sales staff to suggest buyers seek subsidies in neighboring provinces instead.
Hubei is not alone. On Sept. 2, Chongqing’s municipal commerce bureau announced an additional RMB 100 million in funding for its trade-in program—but warned that the budget is capped and will be distributed on a first-come, first-served basis. The city has also shifted from generous fixed subsidies to a model tied to a percentage of the car’s value, capped at a lower ceiling. Provinces such as Hebei and Yunnan have introduced similar “voucher rush” models, while Hainan now mandates that new vehicles be registered locally to avoid cross-regional gaming of the system.