Demand for new vehicles has increased in the Chinese market following the tax changes. Photo: AP
Of 1.09 million new cars benefited from the reduction in China’s vehicle purchase tax for the first full month of the rule’s implementation, according to the country’s leading tax regulator.
The tax reduction policy, which applies to some small-engined cars, had saved car buyers about 7.1 billion yuan (about $ 1.06 billion), according to figures released by the State Administration. of Taxes of the Asian giant.
China decided in late May halves taxes (from 10% to 5%) to the purchase of cars with a fixed price not exceeding 300,000 yuan (45,000 dollars) and with combustion engines of two liters or less, a measure that will be implemented from 1 June to the end of the year .
Measures to keep pace with the sector have eased the measures against emissions. Photo: Reuters
The strategy is part of a mix of China’s policies to keep the economy stable, while auto sales heavily influence the country’s consumption growth.
“The policy will benefit over 10 million vehicles as well will promote over 1.5 million cars soldsaid Liu Bin, an expert from the China Automotive Technology and Research Center.
Less taxes, more sales
The latest industry data showed that auto sales in China are on the rise. Passenger car retail sales were 1.42 million units in the period June 1 to June 26, which represents a 27% year-over-year increase.
Cui Dongshu, secretary general of the China Passenger Car Association, said the policy is expected to bring an additional 2 million cars to the Chinese auto market this year, thus reversing annual sales from an expected 6% decline to a 4% increase.
The benefits for electric cars also remain in China.
The forecast for 2022 is that the largest auto market on the planet is approaching 21 million cars. And that’s even after retail sales fell 12.8% in the first five months of this year compared to the same period in 2021.
At an executive meeting held on June 22, the State Council announced that China will implement more measures to support the consumption of automobiles, including second-hand cars, new-energy vehicles and parallel import vehicles.
Relevant policies are expected to increase consumption of automobiles and other related products by approximately 200 billion yuan (US $ 30 billion) this year.
The tax reduction policy is also aimed at what in China are called New Electric Vehicles (NEV), especially during the pandemic.
In addition, the Chinese authorities have considered extending subsidies for the purchase of electric vehicles up to 25,000 yuan ($ 3,500) per vehicle. The government is also implementing more relaxed emission standards to provide relief for combustion car manufacturers, according to industry sources.
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Source: Clarin
