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Car Sales Unexpectedly Sliding, China Opts for U.S.-Style Cash-for-Clunkers Program

Incentive program includes buses and trucks.

by on Jun.08, 2011

China has become the world's largest automotive market, cities like Shanghai choked with traffic.

With the nation’s automotive market showing some unexpected signs of weakness, nervous bureaucrats have rolled out an incentive effort loosely modeled upon America’s controversial Cash-for-Clunkers program.

After years of double-digit sales gains, what is now the world’s largest automotive market posted 14% decline in sales last month compared to April.  But whether that was a temporary aberration or signs of a longer-term slowdown remains to be seen.

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Either way, it is creating deep worries in a country where automotive demand has helped fuel a booming economy.  And industry leaders are fretting about the billions they are spending to expand capacity to match earlier sales expectations.