(Dec 31): China has adjusted its cash-for-clunkers programme that could impact lower-priced brands such as BYD Co, potentially reducing the boost to new car sales next year. To receive the maximum 20,000 yuan subsidy, a new car would need to cost at least 166,700 yuan. Even though the extension of trade-in subsidies is welcome news to the auto industry, the new conditions lend uncertainty to how much the programme will underpin demand in 2026. An earlier-than-anticipated withdrawal of the trade-in programme in some parts of the country this year hit auto sales, leading to an 8% drop in November during what is usually a peak time for demand. “The revised 2026 vehicle trade-in subsidy programmes will reduce support for mid-to-low-priced vehicles under 150,000 yuan, a shift from 2025 policies that offered uniform subsidy amounts,” the analysts wrote in a note.

Source: The Edge Markets December 31, 2025 05:27 UTC