Chongqing launches subsidy for local cars

Chongqing has become the first city to subsidize purchases of locally-made vehicles, a policy that could boost sales for the local venture between Ford Motor (F.NYSE), Mazda Motor (7261.TYO) and Chongqing Changan Automobile (200625.SH), Bloomberg reported. The city is offering subsidies of up to RMB3,000 (US$471) on vehicles with engines smaller than 1.6 liters until February next year, as well as subsidies for trading in locally made appliances, the Chongqing Daily reported, citing a teleconference held by local authorities on May 31. The program is expected to boost Chongqing’s new car sales by RMB3 billion (US$471 million) this year, the paper quoted an unidentified government finance official as saying. Chongqing could be the only local government to introduce such incentives, since cities such as Beijing are discouraging growth to limit the number of vehicles on their roads, said Scott Laprise, an analyst at CLSA Asia Pacific Markets.