Beijing – The Chinese government is trying to stimulate flagging car and light truck sales by changing the tax regime on new vehicle sales.
From 1 July, buyers will pay sales taxes based on prices after any discounts. Currently, a 10% tax is levied on the list prices of light vehicles, according to the ministry of finance.
China’s new-car market started contracting in July 2018, and continues to shrink. In the first four months of this year, new light-vehicle deliveries fell 15% to about 6.8m. Although car makers and dealers have offered steep discounts to new car buyers since the start of this year, the market continued to contract.
The car industry uses polyurethane products for many components, such as seats, headliners and carpet underlay. Consultants reports suggested that Chinese consumers were waiting for a market stimulus before making purchases.
This story appeared in Automotive News China.