China's Government to Revive Auto Scrappage Incentive
China's cabinet agreed to revive financial incentives for consumers to trade in their passenger cars to help increase demand in the world's biggest vehicle market, a government official said.
The government also is conducting feasibility studies on incentives for new-car buyers in rural areas, the official said.
Government officials are under mounting pressure to revive consumer demand after the economy grew slower than forecast and vehicle sales slumped. In 2009, China introduced scrappage incentives to counter the global financial crisis, spurring 49.6 billion yuan ($7.8 billion) in new car purchases the following year.
China's total vehicle sales declined 1.3 percent in the January-to-April period, the worst showing since 1998 when deliveries fell 1.6 percent, according to data compiled by the China Association of Automobile Manufacturers.
Reuters reported earlier that the government soon will provide subsidies to rural residents who trade in used vehicles for fuel-efficient new ones.