ID :
55031
Mon, 04/13/2009 - 07:58
Auther :
Shortlink :
https://www.oananews.org//node/55031
The shortlink copeid
Gov't finalizes 'tax breaks for clunkers' program
SEOUL, April 12 (Yonhap) -- The government will offer local motorists tax benefits for trading in their old vehicles as part of efforts to support the struggling auto industry, officials said Sunday.
The move comes as local carmakers are reeling from sinking demand at home and
abroad. Ssangyong Motor Co., the smallest automaker in the country, is under
bankruptcy protection, while others have cut output to cope with plunging sales.
According to the plan, the government will waive 70 percent of purchase and
registration taxes for individuals and companies when they trade in cars
registered before Dec. 31, 1999, with a 2.5 million won (US$1,874) cap per
vehicle imposed. The tax measure will be effective from May-December.
Market watchers said the government measure will likely induce troubled carmakers
to cut product prices by more than the tax benefit in an effort to lure more
buyers to showrooms.
At the end of last year, cars registered before December 1999 numbered 548,000
units, or 32.6 percent of the registered vehicles totaling 16.8 million,
according to government data.
The government said it will encourage the central government, municipalities and
public companies to replace vehicles that meet the requirements.
In an effort to boost demand for vehicles, the government is also considering
providing more liquidity to auto finance companies, including the purchase of
their bonds, the officials said.
Industry leader Hyundai Motor Co. and other carmakers have been stung by the
global economic recession that made a big dent in global car demand.
In March, the five local carmakers sold a combined 402,563 vehicles, down 18.7
percent from a year earlier, with Hyundai's sales falling 9.8 percent to 233,443
units.
Ssangyong Motor, owned by China's top automaker, Shanghai Automotive Industry
Corp. (SAIC), was placed under court receivership in February under the weight of
ballooning losses and plunging sales.
It posted a net loss of 709.7 billion won (US$530.3 million) in 2008 on sales of
2.5 trillion won, down 20 percent from a year earlier. In the first three months
of this year, Ssangyong's vehicle sales nosedived 76 percent to 6,471 units.
Last week, Ssangyong said it will eliminate 2,646 jobs, or about 37 percent of
its workforce, in a desperate effort to turn itself around and avoid liquidation.
(END)
The move comes as local carmakers are reeling from sinking demand at home and
abroad. Ssangyong Motor Co., the smallest automaker in the country, is under
bankruptcy protection, while others have cut output to cope with plunging sales.
According to the plan, the government will waive 70 percent of purchase and
registration taxes for individuals and companies when they trade in cars
registered before Dec. 31, 1999, with a 2.5 million won (US$1,874) cap per
vehicle imposed. The tax measure will be effective from May-December.
Market watchers said the government measure will likely induce troubled carmakers
to cut product prices by more than the tax benefit in an effort to lure more
buyers to showrooms.
At the end of last year, cars registered before December 1999 numbered 548,000
units, or 32.6 percent of the registered vehicles totaling 16.8 million,
according to government data.
The government said it will encourage the central government, municipalities and
public companies to replace vehicles that meet the requirements.
In an effort to boost demand for vehicles, the government is also considering
providing more liquidity to auto finance companies, including the purchase of
their bonds, the officials said.
Industry leader Hyundai Motor Co. and other carmakers have been stung by the
global economic recession that made a big dent in global car demand.
In March, the five local carmakers sold a combined 402,563 vehicles, down 18.7
percent from a year earlier, with Hyundai's sales falling 9.8 percent to 233,443
units.
Ssangyong Motor, owned by China's top automaker, Shanghai Automotive Industry
Corp. (SAIC), was placed under court receivership in February under the weight of
ballooning losses and plunging sales.
It posted a net loss of 709.7 billion won (US$530.3 million) in 2008 on sales of
2.5 trillion won, down 20 percent from a year earlier. In the first three months
of this year, Ssangyong's vehicle sales nosedived 76 percent to 6,471 units.
Last week, Ssangyong said it will eliminate 2,646 jobs, or about 37 percent of
its workforce, in a desperate effort to turn itself around and avoid liquidation.
(END)
