The Chinese government has announced a number of measures designed to provide a boost to the country's auto industry, it was confirmed yesterday (14th January).

The State Council, the Chinese cabinet, revealed that it will cut sales tax for people buying cars with engines below 1.6 litres in half to five per cent, starting next Tuesday and running until the end of the year.

In addition, it has launched a five billion yuan programme aimed at offering one-off cash subsidies to owners of high-emission vehicles if they switch to their more fuel-efficient counterparts.

One section of a statement on the cabinet's website, gov.cn, read: "To speed up the consolidation and revival of the auto industry, China must implement an active policy to boost consumption."

Furthermore, the government revealed that it will be establishing a ten billion yuan fund to help the development of new renewable energy technologies to aid the proposed mass production of electric vehicles.

Guidance has also been issued to automakers in relation to developing their own brands and setting up export-focused production bases for vehicles and their various parts.

The announcement is widely being seen as a response to China's latest passenger car sales figures, which show growth of 7.3 per cent in 2008, the first single-digit total for over a decade.

Source:

China unveils plans to boost auto industry (14/01/09)
http://uk.reuters.com/article/consumerproducts-SP/idUKPEK17115020090114?sp=true