Dec. 31 (Bloomberg) -- SAIC Motor Corp., China’s biggest carmaker, rose for a second day in Shanghai trading, heading for a 17-month high, after its municipal government agreed to offer rebates to consumers buying hybrid or electric vehicles.
The stock climbed 3.3 percent to 17.67 yuan at 11:22 a.m. in Shanghai, heading for its highest close since July 2011. The gain follows a 3.6 percent advance the previous trading day, paving the way for SAIC to gain 25 percent for the year, its biggest annual increase since 2009. BYD Co. and Chongqing Changan Automobile Co. also rose in Hong Kong and Shenzhen respectively.
The government in Shanghai, one of six municipalities approved to subsidize the purchase of hybrid and electric vehicles using both central and local funding, said Dec. 28 it will offer as much as a 40,000 yuan ($6,422) rebate to motorists. The move is part of China’s plans to put half a million so-called new energy vehicles on its roads by 2015 and more than 5 million units by 2020.
Shanghai will provide 30,000 yuan of funding to plug-in hybrid car buyers and 40,000 yuan to all-electric car consumers, according to a statement on the local government’s website. The city, which has been limiting new car plates through auctions, will issue special license plates for alternative energy vehicles, according to the statement. The policy is effective through next year, according to the government.
SAIC, which makes cars with General Motors Co. and Volkswagen AG, started selling the Roewe E50 electric car in November starting at 234,900 yuan. SAIC and GM began marketing the all-electric Springo last month with a starting price of 258,000 yuan. SAIC and Volkswagen also plan to introduce two electric cars next year.
The local government’s subsidy is on top of the central government’s aid of as much as 60,000 yuan for the purchase of electric cars and as much as 50,000 yuan for plug-in hybrids. By comparison, U.S. consumers are eligible to receive $2,500 to $7,500 of federal tax credits for buying such vehicles.
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