AM Online

China boosts car industry

Measures to incentivise motorists to buy more fuel-efficient cars have been announced by the Chinese government.

It will halve the tax on cars with engines up to 1.6-litre to 5% and put aside £500m to encourage rural consumers to part-exchange their old cars for newer low emissions models.

It will also provide £1bn for the largely state-run Chinese car industry for development of alternative fuel vehicles in the next three years.

Hit by the global downturn, China's car sales have slowed to a forecast 5% growth this year, the lowest for a decade. Its government wants to boost this to at least 10%.

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