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Changan's MPV
Changan dangles discounts for rural consumers
Reuters | 2019/2/15

SHANGHAI -- Chongqing Changan Automotive said on Wednesday it would offer discounts to buyers in rural areas, the first big Chinese automaker to do so after Beijing promised to roll out supportive policies for the world's largest auto market.

The carmaker, headquartered in Chonqing, said in a statement that it would offer customers up to 22,000 yuan ($3,255.50) in subsidies on the Oshan series of multipurpose vehicles in large rural areas, without specifying where.

The company said it was footing the bill for the subsidies and was not receiving incentives from the government.

However, expectations of fatter earnings pushed Changan shares up nearly 10 percent to their highest level since July, in afternoon trading, after local media reported the news.

China is trying to persuade consumers to loosen their purse strings as the slowing economy prompts concerns among policymakers about jobs. State media reported this month that Beijing households have been given subsidies to buy electrical appliances.

China's state planner said last month it would provide "appropriate" subsidies to boost rural sales of some vehicles and purchases of new-energy vehicles, without giving details.

China's light-vehicle sales in 2018 declined for the first time since the 1990s, falling 2.8 percent from a year earlier, while industry trade groups and analysts said smaller cities that were leading the growth in China's auto sales over the past few years, were most hit.

China Changan Automobile Group, the parent group of Changan which has joint ventures with global automakers, including Ford Motor Co., Peugeot SA and Mazda Motor Corp., sold 2.14 million cars and light trucks last year, down by around 25 percent from 2017.

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