Chongqing - At a press conference on August 22, the Chongqing Municipal Commission of Commerce announced a boost to the city's consumer trade-in program. From January to July, retail sales of new energy vehicles, home appliances, and building materials increased by 14.5%, 6.0%, and 6.1%, respectively, supporting steady economic growth.

Consumers test-driving three-wheeled motorcycles. (Photo/Zheng Ran)

The Chongqing government has unveiled an implementation plan for promoting consumer goods trade-ins, which optimizes and upgrades existing subsidy policies. This initiative aims to enhance the trade-in process for vehicles, electric bikes, home appliances, and kitchen and bathroom products, further unlocking consumer potential.

The new policy increases old car scrapping subsidies to up to 20,000 yuan (about USD 2,803) per vehicle and trade-in subsidies to up to 12,000 yuan. Electric bike trade-ins now receive a 500 yuan subsidy. 

Consumers can receive up to 2,000 yuan for trading in old green and smart home appliances such as refrigerators, washing machines, televisions, air conditioners, computers, and dishwashers.

The policy also includes specific support for the transportation sector, focusing on scrapping outdated operating vessels and replacing them with new energy buses and power batteries.

In July, China announced it would allocate about 300 billion yuan (approx. USD$42 billion) in ultra-long-term special treasury bonds to support large-scale equipment upgrades and trade-in deals for consumer goods. 

"That is expected to ultimately promote an increment of more than 600 billion yuan in consumption, effectively driving the growth of total retail sales in the second half of the year," said Chang Haizhong, executive director of corporates at Fitch Bohua.

Yang Jing, Labor Union Chairwoman of Chongqing Bescar Auto Co. Ltd., said the new scrappage and trade-in subsidies have sped up replacement plans and increased demand for new vehicles. Bescar is among the top 50 national auto dealer groups and a major dealer in Chongqing.

"For example, AITO has introduced an additional trade-in subsidy of up to 20,000 yuan for existing customers on top of national policies. Combined with zero down payments and ultra-low finance rates, this policy further lowers consumers' barriers to purchasing new cars," said Yang.

The new AITO M7 SUV. (Photo/AITO)

Yang noted that since the policy's rollout, trade-in sales have steadily increased, with a 50% rise in trade-in customers year-over-year. This year, Bescar's new car sales have surged, with new energy vehicles making up nearly 40% of total sales, up almost 10 percentage points.

Zhang Xiaowen, an official of China Construction Bank Chongqing Branch, announced that the bank has partnered with 60 leading car brands, including BYD, Tesla, AITO, Xiaomi, and NIO. They offer car purchase installment plans with as low as 0% down payment, zero or low interest rates, and terms of up to 5 years.

Figures released by the National Bureau of Statistics (NBS) showed that China's retail sales, a key measure of consumer spending, grew 2.7% year-on-year in July, up from the 2% growth in June.

NBS data showed that retail sales of communication equipment, sports and entertainment products, and electric vehicles grew by 12.7%, 10.7%, and 36.9% year-on-year in July, respectively.