Shanxi sets up fund of RMB 4 billion for development of the car industry

Shanxi province in China is about to set up a fund of RMB 4 billion which will be used for the development of the automobile industry. This action plan has been issued by the municipal government this week, according to Shanghai Metals Market.

Each city in the province will receive around RMB 120 million for boosting 100,000 units of vehicles. Taxpayers who are identified as a high-tech enterprise will pay a lower rate of corporate tax, at 15%.

Additional 30 per cent of allowance will be paid by the province, on top of the current national subsidy for replacing vehicles designated for use in the public sector with new-energy vehicles.  

Against every purchase of a locally-manufactured car or heavy truck that runs on clean fuels, buyers will get a subsidy of RMB 10,000, while against the purchases of individual passenger vehicles, consumers will get a subsidy of RMB 5000.

These new plans towards increasing the production and consumption of domestic vehicles are expected to give a further boost to the secondary aluminium sector, as the requirement of aluminium sheets and rolls will increase.

Already due to the energy conservation, emission reduction and improvement of fuel efficiency in China, the automobile industry has been required to develop towards an increasingly lightweight trend and thus, replacing the use steel with aluminium.

China, being the world's most important aluminium processing & consumption base, produced 10.70 million tons of aluminum sheets & strips and 2.665 million tons of aluminum foils in 2015, a year-on-year rise of 8.5% and 0.6%, respectively. The output of aluminum sheets & strips and foils is expected to maintain a pace of about 7% and 5% during 2016-2020, separately.