China auto sales rise in early October as tax cut attracts buyers
Auto sales in China rose in the first half of October after the central government cut a tax on passenger-vehicle purchases at the start of the month.
Average daily retail sales from Oct. 1 to Oct. 16 jumped 12 percent from a year earlier, according to data from the China Passenger Car Association. Deliveries in the second week of October were the highest for that period in five years, the industry group said in a statement released on Wednesday.
"The effect of the tax reduction has been outstanding," said Cui Dongshu, the auto association's secretary general. "We expect the gains to be sustained for the rest of the month."
The pickup in demand follows the announcement of stimulus measure at the end of September, after lobbying by the state-backed China Association of Automobile Manufacturers amid weak economic expansion. China last unleashed steps to boost demand amid the global financial crisis, when car-buying subsidies helped push the country past the U.S. in annual sales in 2009.
China cut the purchase tax to 5 percent from 10 percent on vehicles with engines 1.6 liters or smaller, effective from Oct. 1 through the end of next year. The directive also forbade local governments from restricting the purchase and operation of electric vehicles and reiterated support for promoting new-energy vehicles and battery development.
In the first eight months of this year, 68 percent of cars sold in China had engines smaller than 1.6 liters, according to Bank of America-Merrill Lynch.
Retail deliveries of cars, SUVs and multipurpose vehicles increased 5.8 percent to 14.4 million units in the first nine months, according to CPCA, the slowest pace in three years. Those figures do not include sales of commercial vehicles.
"The effect of the tax reduction has been outstanding," said Cui Dongshu, the auto association's secretary general. "We expect the gains to be sustained for the rest of the month."
The pickup in demand follows the announcement of stimulus measure at the end of September, after lobbying by the state-backed China Association of Automobile Manufacturers amid weak economic expansion. China last unleashed steps to boost demand amid the global financial crisis, when car-buying subsidies helped push the country past the U.S. in annual sales in 2009.
China cut the purchase tax to 5 percent from 10 percent on vehicles with engines 1.6 liters or smaller, effective from Oct. 1 through the end of next year. The directive also forbade local governments from restricting the purchase and operation of electric vehicles and reiterated support for promoting new-energy vehicles and battery development.
In the first eight months of this year, 68 percent of cars sold in China had engines smaller than 1.6 liters, according to Bank of America-Merrill Lynch.
Retail deliveries of cars, SUVs and multipurpose vehicles increased 5.8 percent to 14.4 million units in the first nine months, according to CPCA, the slowest pace in three years. Those figures do not include sales of commercial vehicles.
