(Yicai) July 26 -- Shares of Chinese makers of trucks and buses soared after the nation introduced its first trade-in policy for commercial vehicles to reduce traffic emissions.

Sinotruk Jinan Truck [SHE: 000951] skyrocketed by the exchange-imposed limit of 10 percent to close at CNY14.96 (USD2.10). Equities of Zhongtong Bus Holding [SHE: 000957], Dongfeng Auto [SHA: 600006], and Yutong Bus [SHA: 600066] all gained more than 6 percent.

Each eligible vehicle will be given a subsidy of CNY30,000 to CNY80,000 (USD4,140 to USD11,040), according to a document released by the National Development and Reform Commission and the finance ministry yesterday.

The policy particularly targets diesel vehicles used for cargo transport. It aims to remove vehicles that belong to the national stage-three emission class, equalling the Euro 3 emission standards, and below. More specifically, when buyers purchase a new eligible vehicle and scrap the old one, they will get CNY80,000. Those who are merely buying a new vehicle will receive a subsidy of CNY35,000. Those who are only getting rid of an old car will have CNY30,000.

In terms of passenger vehicles, the new policy gives each upgrade of electric buses aged eight and above, as well as the corresponding batteries, a subsidy of CNY60,000 on average.

The policy exceeds market expectations, Citic Securities wrote in a research report today. China had around 590,000 heavy-duty trucks under the stage-three emission standards and about 1.2 million light-duty trucks as of Dec. 31, last year, which means that the incentives could prominently boost sales, it added. The brokerage also calculated that the nation had around 100,000 eligible electric buses to be replaced.

The subsidies are good news for the automotive market, Cui Dongshu, secretary-general of the China Passenger Car Association, wrote in an article. The policy is likely to effectively hike auto sales by around two million units this year, resulting in transactions exceeding CNY100 billion (USD13.8 billion), Cui predicted.

Editor: Emmi Laine