Chinese auto market will turn to marketization in 2018, saying goodbye to purchasing tax preferential policy. Ministry of Finance officially published the exit plan of purchasing tax policy in the next year that passenger vehicle with displacement no larger than 1.6L will face a tax rate of 7.5% in the year 2017, and the policy will exit in 2018.
Cui Dongshu, General Secretary of CPCA believes that, although the preferential policy shows a weakening support for auto market, it still benefits the market. “To achieve the steady growth in 2017, the preferential policy with a rate of 7.5% not only meets customers’ demand but also prevents a sudden decline of auto sales.”
Although the market has not met the complete withdrawal of preferential policy, panic buying at the end of year already begins. Reporters found that dealerships are conducting promotion activities in Beijing. One sales person said that they are ushering in an increasing number of customers who want to choose and buy vehicles every day. Data shows that auto sales volume reaches 2.94m units in November, increasing 16.55% compared with November, 2015. Passenger vehicles sell 2.59m units, increasing 17.24% and making monthly sales record.
Xu Haidong, Assistant General Secretary of CAAM said that, the annual sales are expected to exceed 28m units with a growth rate of 13.9%, influenced by the policy. But it is also predicted that the year 2017 may face a declining growth of 6% optimistically.
