(Yicai Global) March 7 -- In the face of declining sales and to boost consumption, China’s central Hubei province has joined hands with automakers to launch a series of subsidy measures. Fifty-eight models from seven brands, where Dongfeng Motor works with Groupe PSA, Honda Motor and Nissan Motor, cut prices this month by more than 50 percent.

According to the promotional poster released by local dealers, Dongfeng Citroën C6, priced at CNY210,000 (USD30,282), can enjoy a comprehensive subsidy of up to CNY90,000 (USD12,978) from the government and enterprises. After the allowance, the Class B+ sedan reaching a wheelbase of 2,900 millimeter starts at CNY121,900, a price reduction of 43.5 percent.

In addition, the C3-XR with a guide price of CNY113,900 can enjoy a subsidy of CNY56,000, equaling a 50.8 percent cut. Priced at CNY179,800, Nissan Teana had a price cut of 22.2 percent, with the price of the Honda UR-V is down 27.6 percent at CNY246,800.

Many Dongfeng dealers have seen a huge wave of buyers coming to showrooms because of the discounts. In fact, even on weekdays, there have been customers looking and purchasing cars, one dealer told Yicai Global.

The subsidy policy runs from March 1 to 31 and requires a vehicle to be bought and registered in Hubei where Dongfeng Motor is based. Then the 4S store and local government will return the subsidy amount to the buyer’s bank account within 15 working days.

A Dongfeng insider told Yicai Global that users’ response has exceeded expectations and the subsidies have played a very big role in stimulating and promoting sales.

The sales manager of a Dongfeng Citroën 4S store in Shanghai told the media that the current discount for C6 models in the city is just CNY40,000, and the large rebate is only available in Hubei. According to his understanding, there are no C6 cars for spot sale in the province.

Dongfeng Motor’s passenger vehicle sales fell 4.4 percent to 2.2 million in 2022. In 2023, it set a sales target of 2.6 million, an increase of about 22 percent on last year. The start of a ‘price war’ is set to bring considerable growth for Dongfeng series passenger cars in the short term.

With the cancellation of national subsidies for new energy vehicles and the halving of vehicle purchase tax, coupled with the Chinese New Year holiday, data from the China Passenger Car Association showed that retail sales of passenger vehicles tumbled 38 percent to 1.29 million units in January.

Editors: Zhang Yushuo, Peter Thomas