Four auto industry related policies to be implemented next year

Shanghai (Gasgoo)- With only a month left in 2017, next year will see the implementation of several important policies in auto industry.

Tax incentive expiration on small-engine cars

From the first day of 2018, the sales tax on cars with engines of 1.6 liters or below will return to 10 percent from the current 7.5 percent. There is only a month left for the purchasing incentives.

In order to stimulate the demand of auto market, China relevant departments introduce vehicle purchasing tax cut policy in 2015, under which the tax is halved to 5 percent from the original 10 percent. At that time, the policy was announced to expire at the end of 2016. But in 2017, the tax rose to 7.5 percent and will return to 10 percent in 2018.

Subsidy phasing out for new energy vehicles

Unnamed people close to the matter said that new energy vehicle subsidy will be reduced by 20 percent in 2018 and decrease at a 20 percent yearly rate until 2020 when the subsidy will be terminated.

The decrease in new energy vehicle subsidy seems to have little effect on its sales. Cui Dongshu, secretary-general of the China Passenger Car Association (CPCA), said that the expiration of vehicle purchasing tax will give prominence to the advantages of new energy vehicles, thus promoting the development of the emerging segment.

Lower down payment for vehicle buyers

Recently, the People’s Bank of China and China Banking Regulatory Commission announced that from January 1st, 2018, the loan of traditional fossil-fuel powered vehicles can be 80 percent while the loan for new energy vehicles can be up to 85 percent. The loan ratio of used cars is also raised to 70 percent from 50 percent.

Full implementation of electronic license plates

It is said that from 2018 on, China will promote the use of electronic license plates step by step. Electronic license plate, also called digital display license plate, is an identification sign mounted on vehicles that can store all information of the vehicle and offer digital monitoring services.

According to the schedule, electronic license plate will be used in Shenzhen, Beijing and Tianjin as pilot projects and will be used across the country in the second half of next year.