China's latest tax incentive for the automotive industry is expected to boost sales of passenger cars with small displacement.
The State Council reintroduced tax incentives at the end of September to encourage purchase of cars whose engine is 1.6 liters or below. Purchase tax on such passenger cars will be halved for buyers from October 1 this year to the end of 2016.
China's auto market has been cooling since the beginning of this year. In August, sales of automobiles in China totaled 1.66 million units, a rise of 10.74 percent month on month but down 2.98 percent year on year.
In the first eight months, auto output fell 0.24 percent year on year to 15.1824 million units, while auto sales basically stayed flat compared to the same period last year during the eight months, according to the China Association of Automobile Manufacturers (CAAM).
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