China to offer incentives to scrap old cars

China plans to offer incentives for car owners to scrap their old models in favour of new ones, in a bid to lift the auto industry as it enters a period of crisis, according to state media.

The measure is part of a new package being prepared in Beijing aimed at avoiding a US-style collapse of the local auto sector, the Xinhua news agency reported.

AFP

“Details of the plan will be announced very soon,” said an unnamed official with the commerce ministry. He did not give any details.

The official was speaking shortly after dismal figures were released showing that Chinese auto sales fell 14.6 percent in November from a year earlier.

Other measures that China may adopt to bolster auto sales include cuts in the 10-percent vehicle purchase tax and easier access to car loans, according to Xinhua.

The health of the auto industry is crucial for the overall well-being of the Chinese economy as economists have argued more than 150 industries depend on it, including the steel and petrochemical sectors.

“The auto industry’s current difficulties are what concern me the most,” Premier Wen Jiabao was quoted as saying in a recent trip to the southwestern city of Chongqing, a car manufacturing key area of China.

Read the rest:
http://news.yahoo.com/s/afp/20081227
/bs_afp/chinaeconomyauto_081227024548

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