Now here is an approach to improving auto sales I can agree with:

South Korea announced yesterday tax incentives and easier consumer financing to support its domestic car industry, which is reeling from a global demand slump.

The steps bolstered shares of Hyundai Motor Co and Kia Motors Corp, the country’s two biggest car makers, as the measures are expected to lift their local sales, which usually carry higher margins.

“The announcement is definitely positive, particularly for Hyundai and Kia which are dominant players in the domestic car market,” said Lee Sang-hyun, an auto analyst at Hana Daetoo Securities.

The government plans to provide temporary tax incentives by lowering purchasing and registration taxes by 70 per cent from May to December to customers who would buy new cars to replace old ones registered before 2000.  [Business Times]

In the US we continue to throw billions of dollars with more to come at failing auto companies while Korea has not sent any bail out money to their auto industry and instead cut taxes.  It will be interesting to see, which approach works.