(Yicai) April 8 -- China is seeking to promote vehicle trade-ins and boost auto sales by allowing buyers to borrow the full cost of fuel-powered and new energy vehicles. Shares of Chinese carmakers jumped.

The People's Bank of China and the National Administration of Financial Regulation announced on April 3 that they were raising the limit on what financial institutions can lend on own-use fuel and new energy vehicles to as much as 100 percent from 80 percent and 85 percent previously.

The limits for commercial-use fuel cars, NEVs, and pre-owned autos remain unchanged at 70 percent, 75 percent, and 70 percent. Financial institutions are also encouraged to waive the penalty for early loan repayments during the trade-in process to support vehicle sales.

One-hundred percent financing will help people buy cars, while the penalty waiver will ease the burden on buyers, said Dong Ximiao, chief researcher of China Merchants Bank-China Unicom Consumption Financehe.

Shares of Seres [SHA: 601127] closed 2.5 percent higher at CNY88.55 (USD12.24) each in Shanghai today. BYD [SHE: 002594] ended up 1.8 percent at CNY212 (USD29.31) in Shenzhen, while JAC Motors [SHA: 600418] rose 3 percent to close at CNY16.68.

China’s auto market has entered a peak replacement period, according to Huaxi Securities. The number of new cars bought and replaced will likely jump by 1.2 million this year from last, giving a boost to medium and high-end models, it added, noting that the rising supply of NEV models and lower battery costs are also expected to boost sales by independent Chinese NEV makers.

Editor: Martin Kadiev