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Focus on emission cut in 2011
By Pan Xiaoyi |
November 18, 2010, Thursday
|
Print Edition
Print Edition
CHINA'S auto sales are expected to drive forward in the remaining two months of this year before waning next year as the country may change gear to focus more on emission reduction in 2011, industry watchers said.
While the auto industry has propelled China's economic recovery in the past two years, the explosive jump in sales has led to major traffic problems and undercut the government's efforts to reduce emissions, industry insiders said.
"China will shift its focus from boosting consumption to containing pollution," said Su Hui, a senior official at China Automobile Dealers Association. "The so-called vehicle and vessel taxes underscored the determination to curb excessive growth of cars."
The National People's Congress, China's top legislature, is reviewing a draft law to increase taxes on vehicles with engines over 1.6 liters, especially gas-guzzling cars with engines over 2.5 liters.
Meanwhile, media reports have said the preferential purchase tax will be definitely scrapped next year.
China halved the purchase tax to 5 percent in 2009 and kept the tax at 7.5 percent this year, which helped the country overtake the United States as the world's largest auto market.
Subsidies on purchases by rural citizens and on upgrades to new cars will also expire next year.
"It is reasonable to see a year-on-year sales drop in the first quarter of next year as a result of the policy adjustment," said Rao Da, secretary-general of the China Passenger Car Association.
"Moreover, the incentives have boosted purchases in the past two years, and it will take time to create new demand."
To entice buyers and boost sales, car makers will launch 12 new models, including Volkswagen's new Polo and Touran, in November and December.
Industry watchers also called for incentives for green cars to boost sales.
While the auto industry has propelled China's economic recovery in the past two years, the explosive jump in sales has led to major traffic problems and undercut the government's efforts to reduce emissions, industry insiders said.
"China will shift its focus from boosting consumption to containing pollution," said Su Hui, a senior official at China Automobile Dealers Association. "The so-called vehicle and vessel taxes underscored the determination to curb excessive growth of cars."
The National People's Congress, China's top legislature, is reviewing a draft law to increase taxes on vehicles with engines over 1.6 liters, especially gas-guzzling cars with engines over 2.5 liters.
Meanwhile, media reports have said the preferential purchase tax will be definitely scrapped next year.
China halved the purchase tax to 5 percent in 2009 and kept the tax at 7.5 percent this year, which helped the country overtake the United States as the world's largest auto market.
Subsidies on purchases by rural citizens and on upgrades to new cars will also expire next year.
"It is reasonable to see a year-on-year sales drop in the first quarter of next year as a result of the policy adjustment," said Rao Da, secretary-general of the China Passenger Car Association.
"Moreover, the incentives have boosted purchases in the past two years, and it will take time to create new demand."
To entice buyers and boost sales, car makers will launch 12 new models, including Volkswagen's new Polo and Touran, in November and December.
Industry watchers also called for incentives for green cars to boost sales.
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