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CHINA: New scrappage scheme to lift car sales

By just-auto.com editorial team | 9 June 2011

According to a report in China Daily, the Ministries of Commerce and Finance in Beijing have approved a new package of car scrappage incentives.

Under the new scheme, which replaces one which expired at the end of 2010, a grant of up to Yuan 18,000 (US$2,770) will be available for owners of old vehicles between now and the end of 2011.

The new programme applies to 6- to 15-year old vehicles, with owners in rural areas seen as the most likely candidates to be attracted to the scheme. Incentives also apply to buses aged between 8 and 15 years, as well as to 10 to 15 year-old heavy trucks.

After a period of frenetic growth, the Chinese car market is slowing down this year amid government moves to cool down an overheating economy. The latest move could reflect concern in Beijing that the sector could be slowing too quickly, which would hit automaker profitability as prices soften.