China to Revive “Cash-for-Clunkers” Program

China's cabinet has agreed to reinstate financial incentives for consumers who trade older vehicles for new, more fuel-efficient models, according to Bloomberg News.

The news service cites an unidentified government official, who says various ministries are working out such details as which models will be eligible and how the scheme will be funded. The source also tells Bloomberg that the government is studying the feasibility of special incentives for rural consumers.

Beijing wants to jump-start the country's sluggish car market and economy. Motor vehicle sales dipped 1% in the first four months of this year to 6.4 million units.

A revival of incentives could give automakers a lift too. During China's original "cash-for-clunkers" programs in 2009 and 2010, vehicle sales surged 46% and 32%, respectively.