China to help auto sector with supportive policies

China will issue supportive policies for its automakers in the coming months to maintain roughly 10 percent growth in the industry in 2009, the Shanghai Securities News said on Monday.

The policies, worked out by the country's economic planner, include reduction of auto purchase tax and incentives for the development of clean energy cars, the newspaper said, citing unnamed sources.

Other measures, expected to be unveiled by the State Council, or the cabinet, in the first quarter, include encouragement of further industry consolidation, it said.

Government bodies are also mandated to buy the country's self-developed cars in fleet purchases, it added.

After years of double-digit growth, car sales in China slowed significantly especially in the second half of 2008 as a weakening economy curbed demand.

The country in November posted its third monthly fall in car sales last year and the decline is likely to extend into 2009 amid weak consumer confidence, analysts said.