China's automotive industry is getting a much-needed boost as Beijing renews its trade-in subsidy program, offering hope to manufacturers and dealers struggling with declining sales.

The new initiative provides buyers with cash subsidies of up to US$2,858 when trading in their existing petrol and electric vehicles for new models, signaling the government's commitment to supporting the domestic automotive sector.

Authorities had been expected to announce the subsidy extension in early or mid-January, and the move comes at a critical time for an industry facing significant market challenges.

Tian Maowei, a sales manager at Yiyou Auto Service in Shanghai, offered insights into the program's potential impact. 'Renewed subsidies may not be enough to completely stop the sales decline, but the policy demonstrates the authorities' willingness to further stimulate the automotive market,' Maowei explained.

Industry experts suggest that for the subsidies to be truly effective, carmakers and dealers will likely need to complement the government initiative with additional price cuts to maintain customer attraction and competitiveness.

The trade-in scheme represents a strategic approach to revitalizing consumer interest in new vehicle purchases, potentially helping manufacturers navigate the current economic uncertainties.