Chinese Cash for Clunkers Continues Through 2010

China decided to extend the local cash for clunkers program into 2010 as the scheme has the potential to boost car sales even more through the cash incentives offered by the government. The Chinese auto sector posted very high sales in the last few months, with companies selling cars outside the country doing efforts to expand their business in China.

However, the Chinese scheme was less popular than in the United States or other European countries, mostly because the clunker base is smaller compared to these countries.

Nevertheless, large carmakers based in Europe or in the United States are seeking new ways to expand their coverage in China. The best example comes from Audi, the German brand who gets ready to open its second Chinese plant in September. The facility will manufacture the Q5 and the A4L, an extended wheelbase model of the popular A4 sedan.

Audi invested 1 billion yuan ($146.3 million) for the construction of the plant, which is also jointly owned by its Chinese partner FAW Group.

General Motors last week revealed that it delivered the 1 millionth vehicle in China in 2009, a silver Buick LaCrosse sedan.

"For more than a decade, GM has been focused on working with our joint ventures to meet the needs of our local customers," said Kevin Wale, President and Managing Director of the GM China Group. "As the customer is our first priority, GM will continue to roll out new models under our portfolio of six brands to win over more Chinese vehicle buyers and remain ahead of the competition."