China's auto prices up in Sept on higher sales-tax

Shanghai, October 19 (Gasgoo.com) China's automobile prices rose in September, mainly buoyed by an increased sales tax that was aimed at curbing the selling of high-emission cars to achieve energy efficiency, xinhuanet.com reported recently.

Prices of domestically-made vehicles edged up 0.74% from August, a rise of 0.59% from a year earlier after consumption tax increases of up to 20% took effect on September 1, according to the price monitoring center of the National Development and Reform Commission (NDRC).

Prices of SUVs and other sports cars rose a notable 1.14% from August and 1.27% year on year, as the consumption tax on vehicles with engine larger than 3 liters was lifted by 10% to 20%. Multi-purpose vehicle (MPV) prices were up 1.11% from July and 1.92% from a year earlier.

Sedan prices have increased for five consecutive months as engine upgrading drove up production costs significantly. Imported high-emission cars saw price rises of 6.21% from August, and 7.51% from the year earlier, mainly due to the consumption tax rise.

China has raised the sales tax on vehicles with 3.0L-4.0L engines from 15% to 25%, models above 4.0 liters from 20% to 40%, but tax on cars below 1.0 liter has been cut from 3% to 1%, a move to encourage sales of energy-efficient vehicles.

Industry insiders said China's auto prices were expected to slump at the end of the year as the auto sellers, aiming to reach their yearly sales targets, would use discounts to attract consumers.