Authorities in China and the US have proposed a range of incentives to help boost the auto industries in their respective countries, it was confirmed on Wednesday (14th January).

Lawmakers in Washington have put forward a new 'Cash for Clunkers' initiative, designed to help get the oldest, least fuel-efficient and therefore most polluting vehicles off their roads.

Under the terms of the bipartisan move - it is hoped it would also boost badly flagging auto sales - the government would offer individuals up to $4,500 to put towards the purchase of a new car.

Dianne Feinstein, a Democratic senator in California, commented: "We face real challenges with trying to encourage drivers to trade in their older, less fuel-efficient vehicles, particularly in this tough economic climate."

Consumers would be offered the chance to collect vouchers from their dealers which could even be used to cover transit expenses in some instances, while old cars would be scrapped.

It is unclear at this stage whether the programme would form part of the major economic stimulus set to be issued in light of the travails of the 'Big Three' automakers, General Motors, Chrysler and Ford.

However, it would be funded by the Senate from 2012 onwards and target around one million vehicles per year, perhaps replacing similar initiatives already in place in Texas and California.

Meanwhile, the Chinese government confirmed on Tuesday that it will be slashing sales tax on small vehicles and attempting to boost the steel industry to help declining economic growth in the country.

The State Council revealed that sales tax for cars with engines under 1.6 litres would be halved to five per cent, while one-off cash subsidies will be given to anyone swapping high-emission vehicles for cleaner ones.

Furthermore, a Rmb10 billion fund will be launched for new technology vehicles, while the cabinet also revealed that it intends to offer "financial support to promoting the use of energy-saving autos and those fuelled by new energies".

The announcement is particularly timely as the $585 billion stimulus package confirmed previously in Beijing will not come into force until later this year and has had no effect on the auto industry.

Elsewhere, the UK government has launched a new initiative which would offer new car buyers the chance to make use of its loans in order to bolster flagging vehicle sales.

Car sales in the country declined by 36.8 per cent in November on a year-on-year basis, and Jaguar Land Rover and Nissan have recently announced job cuts of 450 and 1,200 respectively.

However, prime minister Gordon Brown is considering boosting an industry which sees motorists borrow £20 billion per year by giving them access to the Bank of England's multi-billion-pound liquidity scheme.

Sources:

Lawmakers push "clunker" plan to spur auto sales (14/01/09)
http://www.reuters.com/article/environmentNews/idUSTRE50D7TK20090114

New car buyers to get Government-assisted credit (15/01/09)
http://www.telegraph.co.uk/finance/newsbysector/transport/4242907/New-car-buyers-to-get-Government-assisted-credit.html

China unveils plans to boost auto industry (14/01/09)
http://www.ft.com/cms/s/67408f48-e264-11dd-b1dd-0000779fd2ac,Authorised=false.html?_i_location=http%3A%2F%2Fwww.ft.com%2Fcms%2Fs%2F0%2F67408f48-e264-11dd-b1dd-0000779fd2ac.html&_i_referer=