China reboots Cash For Clunkers program

If there's been a single reason for hope among auto executives during the past few lean years, it's been spelled C-H-I-N-A. Despite being a difficult regulatory environment with many hoops for automakers to jump through, the People's Republic has shone as the industry's brightest and biggest hope for big volumes and bigger profits. Certainly, the nation has delivered massive sales increases as it has developed into a global superpower, and its population and growing wealth suggests it should be good for many more millions of sales per year. Thing is, recent sales haven't supported this trend, and the Chinese government is reportedly stepping in to try and remedy the problem.

According to the Associated Press, China is planning its own version of the Car Allowance Rebate System (a.k.a. "Cash For Clunkers") that jumpstarted auto sales here in the U.S. during the summer of 2009. The program will subsidize the turn-in of everything from city buses and farm equipment toward the purchase of new vehicles. Depending on the type of vehicle, owners may qualify for subsidies of 11,000-18,000 yuan, or about $1,700-$2,800 USD. China previously offered a similar program at the end of 2009, but it did not make allowances for trucks and buses, and incentives were smaller, averaging about $730.

After years of double-digit sales increases, April showed the nation's first sales decrease in two years, and recently new auto sales have shown signs of slowing down. Fresh sales figures for the month of May are due later this week.

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