China's passenger car market is likely to grow moderately in 2017 after hitting a record high last year, as the government has raised the purchase tax, according to an industry report.
Sales of passenger cars are forecast to rise 7.2 percent to 25.7 million units in 2017, a sharp slowdown from an 18 percent jump in 2016, said the China Auto Industry report, published by Swiss financial firm UBS yesterday.
The government has hiked the purchase tax for cars with engines below 1.6 liters from 5 percent to 7.5 percent this year, which will dampen buying sentiment.
In the first 11 months of last year, overall auto sales rose 14.1 percent from a year earlier to 24.94 million units, according to data from the China Association of Automobile Manufacturers.
Sales of new-energy vehicles are set to "reach 600,000 units in 2017," up 20 percent from last year's, said Hou Yankun, UBS' head of Asia auto research.
