China is in the process of rolling out an automotive sector jumpstart package to avert a similar US crisis, reported Huliq citing the Shanghai Securities News, and the plan might come into effect as early as January. The proposed measures include direct government funding to help automakers upgrade their technologies and support of fuel-efficient vehicles.

According to a Dec 22 survey, nearly half of the country’s car manufacturers are planning for pay cuts and layoffs in 2009 to cope with the sluggish global economy. China’s vehicle sales in November fell 14.6% from the same month a year earlier and passenger car sales were down 10.28% to 522,800 units, according to the China Association of Automobile Manufacturers.

Auto sales volume in the first 11 months of this year totaled 8.63 million, up 8.52% but dipping into single-digit growth territory for the first time in more than three years. 6.16 million passenger cars were sold over the period, up 8.87% from a year earlier. The top three best-selling car models were the FAW-Volkswagen, Shanghai Volkswagen and Shanghai GM.

German luxury car brand Mercedes-Benz beat the downtrend to post an increase of 52% in its China car sales from January to November this year to 35,200 vehicles, reaching its annual sales target a month earlier.

Some background on China’s auto industry from Shanghai Daily:

Domestic vehicle sales increased from 2.73 million units in 2001 to a record 8.79 million last year, making China the world’s second-largest vehicle market. The booming sales volume represents enormous growth, given that 30 years ago only 5000 vehicles were sold in China every year.

The industry entered a new stage in 2001 when it began to benefit from rising personal wealth tied to China’s rapid economic expansion. The lifting of strict controls on vehicle purchases also paved the way for more people to buy a car. The annual sales growth for passenger cars has stabilized at about 25% over the past three years, compared to single-digit growth in mature markets in North America and Europe.

Today, more than 130 vehicle makers are rolling out hundreds of models in China, and the growing market demand has lured most of the world’s auto makers to set up joint ventures in China. BYD Co. recently rolled out the world’s first mass-produced hybrid electric vehicle that boasts advantages over models made by Toyota Motor and General Motors Corp.