New tax cut for buyers of small cars pays off
The central government last October began cutting taxes on new small passenger cars as an interim measure to boost sales.
According to the policy, purchase taxes will be halved for buyers of new passenger cars with an engine size of 1.6 liters or smaller. The policy, which is to expire at the end of the year, has paid off－the market has grown slightly faster since the fourth quarter of last year, especially in small cars.
Tempered expectations for growth in industry
A slowdown in China's economy has led to a concurrent slowdown in the vehicle market, although in the first quarter of the year, vehicle sales in China rose by 5.98 percent year-on-year to 6.53 million units, according to the China Association of Automobile Manufacturers, beating 2015's growth pace.
It is widely seen as impossible for the auto industry to regain double-digit growth, which will exacerbate competition between carmakers and further bring down prices. The auto association has predicted that vehicle sales in China will grow 6 percent this year.
