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Chinese Trade Group Pushes for Permanent Tax Cut on Small Cars
China, which reduced taxes on small, fuel-efficient cars last autumn, should make the cut permanent, asserts the government-backed China Assn. of Automobile Manufacturers.
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China, which reduced taxes on small, fuel-efficient cars last autumn, should make the cut permanent, asserts the government-backed China Assn. of Automobile Manufacturers.
CAAM is lobbying the National Development and Reform Commission to adopt the idea, Bloomberg News reports. The trade group says the measure would boost consumption while focusing the auto industry’s product development on more efficient models.
The key will be to adopt a long-term policy, according to Ye Shengii, CAAM’s associate deputy secretary general. The current tax cut, which is credited for reviving sales growth in the auto market, is scheduled to expire at the end of 2016.
Bloomberg notes that China’s fuel efficiency rules call for average consumption to drop from 6.0 liters per 100 km in 2015 to 5.1/100 km by 2020. CAAM contends that lower taxes on more efficient vehicles would help align consumer behavior with regulatory goals.
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