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April 3, 2020

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Govt plans measures to help ‘crucial’ auto sector

Source: Xinhua | 00:14 UTC+8 April 3, 2020 | Print Edition

China will aim to stabilize new car sales, loosen purchase restrictions in certain cities and invigorate the used-car market in a bid to unleash the consumption potential for cars, an official said yesterday.

As a pillar of the national economy, the auto industry plays a crucial role in boosting domestic consumption and facilitating consumption upgrades, Wang Bin, deputy director of the Department of Market Operation and Consumption Promotion of the Ministry of Commerce told reporters.

Car sales accounted for 9.6 percent of total retail sales in 2019.

Tax revenue and employment in the auto and related industries made up 10 percent of the country’s total, he said.

Due to multiple factors, China’s car sales have fallen for two consecutive years.

Compounded by the COVID-19 pandemic, sales plunged 42 percent year on year during the first two months of this year.

To prop up the market, the government recently announced a slew of measures to boost demand.

A State Council executive meeting on Tuesday decided to extend subsidies and tax exemptions for new energy vehicle purchases by another two years, which were set to expire at the end of this year.

Value-added tax on the sale of old vehicles by second-hand vehicle dealers will be cut to 0.5 percent from May 1 to the end of 2023. Liu Changyu, official with the Department of Foreign Trade of the MOC, said the pandemic overseas inevitably affected the country’s auto trade and supply chains.

China will strengthen international cooperation to maintain the stability of the global automobile industrial chains and supply chains, Liu said.

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