Automakers, dealerships offer subsidies to offset effect of expired sales tax incentives

Shanghai (Gasgoo)- According to data from a local consulting company, the sales of cars with engines of 1.6 liter or below reached 17,077,776 units in 2017, up 0.4 percent year on year. From the second half of 2017, the ratio of such vehicles to the total passenger vehicles kept increasing.

From January 1, 2018, the purchasing tax on cars with engines of 1.6 liter or below has been returned to 10 percent. That means, for a new vehicle priced at RMB 200,000, consumers should pay about RMB 4,274 more than that of before.

A recent survey of the consulting company shows that 53.96 percent dealerships stated that the phasing out of the supporting tax policy had limited consequence on vehicle sales. Most of the dealerships said that the discount in January remained nearly the same as that in December, 2017.

In order to retain customers, automakers also provide support to ease consumers’ concern on price. For example, FAW-VW offers a subsidy ranging from RMB 1,500 to 2,500 to buyers of such models as New Jetta, Bora, Golf and Sagitar with engines of 1.6 liter or below. Some automakers even chose to pay for the added sales tax for consumers in short period, such as BYD, Changan and Geely.