Small Car Sales Boom in Jan on Tax Cut Go back »

2009-02-25 | Nanjing

Auto makers in China reported a substantial sales increase in January following the governmental decision to halve the car purchase tax, the China Association of Automobile Manufacturers (CAAM) said on Feb. 6th.

On Jan 14, the country announced its plan to lower the purchase tax on cars with engines under 1.6-liter from 10 percent to 5 percent from Jan 20 to Dec 31 in a bid to spur domestic auto industry.

The tax cut which took effect before the national Lunar New Year holiday, prompted a major sales boost in China fueled by car buyers' enthusiasm for low-emission vehicles with smaller than 1.6L engines.

Major domestic brands who have seen sales rise due to these cuts include Chery, Geely and BYD. These companies all recorded high sales in January. Monthly sales of Chery exceeded 35,000, the highest figures since the company was founded in 1997. Daily sales topped 2,000 for five straight days from the launch of the tax cut representing a 50 % increased compared with average sales previously.

Geely sold 28,502 cars in January, up 14.5 percent year-on-year. BYD reported a historical high in combined monthly sales of its two low-emission models with 1.5 litre and 1.5 litre engines selling almost 20,000.

Foreign brands also made a good showing. Daily sales of 1.6 liter models by Shanghai GM, namely the Excelle, Chevrolet

Aveo and Lova, increased from about 1,100 units to more than 1,300 after the tax policy took effect.

Low-emission models took up two thirds of the total 35,000-odd cars sold by Sino-Korean joint Hyundai in January.

"Auto sales in Februray were encouraging," Emmanuel Le Flem, General Manger of Nanjing Member A.Raymond  commented "We've experienced the market went down in October, November and December, and hit the lowest record in January.