August Car Sales Surge 25% in China

Retail sales of passenger cars, SUVs and multipurpose vehicles in China jumped 25% to 1.8 million units in August, the China Passenger Car Assn. reports.

Analysts attribute the surge to consumers rushing to buy cars before the government’s tax cut incentive disappears at year-end. CPCA says new-car deliveries through the first eight months of 2016 gained 13% to 14.2 million vehicles.

Buyers also have benefitted from fierce price wars among carmakers, notes Bloomberg News. It cites analysts who predict “pull-ahead” sales will continue through December. But observers warn demand could slump next year when the tax discount ends.

The state-supported China Assn. of Automobile Manufacturers is urging China’s central government to continue the tax break as a way to improve air quality and hike fuel efficiency. The incentive has reduced the purchase tax on new vehicles to 5% from 10% for vehicles equipped with engines that displace no more than 1.6 liters.