South Korea unveils auto industry stimulus

The South Korean Ministry of Knowledge Economy unveiled a program to help the troubled auto industry, offering tax cuts to consumers who buy new cars after selling or scraping their old ones. The package, effective May 1 to December 31, 2009, gives car owners a 70% discount on consumption, registration and acquisition taxes for newly purchased vehicles, regardless of their engine displacements and car types. The tax benefits, which officials said would amount to up to 2.5 million won (US$1, 876) per car, will only be available to those who, as of April 12, 2009, own vehicles purchased before January 1, 2000. The plan also calls for the government to provide more liquidity to auto financing firms and help support research and development (R&D) for more fuel-efficient vehicles. (April 12/13, 2009)