Sales Growth in China Could Slow to 2% in 2017

Growth in demand for cars in China, which surged 14% through the first 11 months of 2016, may slow to 2%-6% next year, says the government’s Ministry of Commerce.

The ministry credits this year’s sales surge to government stimulus efforts, including a 50% tax cut for new cars with small engines. The discount will narrow to 25% in January.

The China Passenger Car Assn. reported earlier this month that sales have surged as consumers scramble to buy before the higher tax rate takes effect. The commerce ministry says the tax increase, coupled with comparisons to this year’s hefty growth rate, will shrink next year’s relative gain.