Wednesday, April 1, 2009

Shenzhen Really Likes BYD

One of my favorite sites for inside info on Chinese cars and car companies, China Car Times, has an interesting story on Shenzhen's support for its local auto company BYD. While the Central Government has really jumped on the hybrid bandwagon with recent policies, most of the subsidies for hybrids and other "new energy" vehicles have been aimed at commercial or public purchases of such vehicles.

Shenzhen is going further by offering subsidies to consumers.
Subsidies of up to 50,000RMB are available to buyers of hybrid motors, and subsidies of up to 60,000rmb are available to buyers of pure electric vehicles...

From what we understand, Shenzhen’s own green car policy is giving out higher subsidies than the Central Governments subsidy plan. For example, if a Shenzhen resident planned to buy the 149,800rmb BYD F3 Dual Mode car in Shenzhen, then the city government would give the consumer a 60% subsidy, making the car nearly 90,000rmb, a fantastic saving. Currently, the USA offers a 20% subsidy for hybrid purchases.

BYD also revealed that their BYD F3DM is also being largely bought by government offices, and company fleet sales, although they plan to carry out a mass marketing exercise to promote the car to private buyers.
Did I read that correctly? A 60 percent subsidy?

In their efforts to ensure that BYD builds the scale necessary to survive for the long-term, does Shenzhen's government risk creating a quasi-private business that will become dependent on government handouts?