Rise in auto sales fuels prospects
Print Edition
China’s auto market grew moderately in September as it reversed a three-month sales drop on annual basis — a positive sign that it could regain momentum in the fourth quarter following a cut in vehicle purchase tax effective from October 1.
Deliveries of passenger cars and commercial vehicles rose 2.1 percent from a year earlier to 2.03 million units last month, the first time sales were above 2 million since March, according to data released by China Association of Automobile Manufacturers yesterday.
The sales boost occurred in September when the State Council announced the purchase tax on cars with a displacement of below 1.6 liters would be cut in half — equivalent to up to 5 percent of the retail price excluding the value-added tax. This tax cut, to run from this month till the end of next year, covers 65-70 percent of the passenger car market that makes the bulk car sales in the country, according to sales data.
Cui Dongshu, secretary-general of the China Passenger Car Association, said the car models to benefit from the tax cut contribute up to sales of 13 million units each year.
“A 10 percent increase can spur hundreds of billions of yuan in consumption,” Cui said.
Following the rebound in September, the combined sales of passenger cars so far this year rose 2.75 percent to 14.54 million units while those of commercial vehicles fell 11.8 percent to 2.5 million units.
The two segments combined grew 0.3 percent so far this year, below the growth target of 3 percent which was revised downward in July from 7 percent proposed at the start of the year by CAAM.
New-energy vehicles — pure electric and hybrid electric cars — outperformed their peers last month, surging 210 percent and 220 percent year on year both in output and sales to reach 28,324 and 28,092, respectively.
China’s auto market has been cooling since 2015 as a result of an economic slowdown, fierce competition and purchase quota policies in first-tier cities.
Amid worsening air quality, the government has rolled out measures including tax redemptions, price subsidies and free number plates to promote new-energy vehicles.
Other steps included backing new-energy car sales and developing power batteries.
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