In a move to help fight recession and entice new car buying, the South Korean government has announced a tax break for all motorists who replace their aging cars. The strategy and finance ministry said the measure, worth up to 2.5 million won (US$1,900), would be available to drivers who trade in a car that is more than nine years old. The incentive, which will run from May to December, was announced as local auto makers feel the bite of the global economic downturn.
South Korean car manufacturers, including Hyundai Motor, have reduced their output due to slumping sales while Ssangyong Motor, the smallest automaker in the country, is under court receivership to avoid bankruptcy.
The tax break will come from reducing purchasing and registration taxes by 70 percent, officials said. They estimated it could potentially affect 548,000 vehicles – 32.6 percent of the total 16.8 million registered in the country.
The government is also considering providing more liquidity to auto finance companies as part of efforts to stimulate demand.
(Source) eTaiwan News
Tags: auto finance companies, car manufacturers, court receivership, economic downturn, hyundai motor, liquidity, old cars, south korea, south korean government, ssangyong motor, tax break