China's government is discussing policies to help auto makers boost sales and fend off the global financial crisis, according to the country's top planning agency.

The government is analyzing policy options, including consumption-tax breaks and subsidies to manufacturers which develop vehicles powered by alternative energies, Chen Jianguo, deputy head of the industrial coordination department of the National Development and Reform Commission, told a conference in Tianjin on Saturday.

Chinese auto makers are facing falling demand and plunging profitability amid rising costs. The country's auto sales fell in August and September as a 64-percent stock-market slump and the economic slowdown curbed demand.

The government held a meeting in Beijing on Saturday of more than 10 auto makers to gather industry suggestions. "It is possible the government may announce policies" to help revive the industry, Chen said.

Chinese car makers have been forced to slash prices, even as steel costs have risen, to compete.

SAIC Motor Corp, China's biggest auto maker, saw a 78-percent drop in its third-quarter profit, Bloomberg News reported. Chongqing Chang'an Automobile, Ford's Chinese partner, had a third-quarter loss of 107 million yuan (US$15.6 million) compared to a 68.4-million-yuan profit a year earlier.

China's car sales rose 11 percent in the first nine months, compared to a 22-percent rise for the whole of last year.

The government is also urging auto makers to take advantage of a reshuffle in the global automobile industry and speed up development of vehicles using alternative energies, Chen said. China's government will help auto makers with technology and financial support to make progress in the area of electric cars, he added.

(Shanghai Daily November 10, 2008)