Shanghai car imports surge after tariff cuts
Updated at 4.02pm:
Car imports jumped 142.8 per cent to 522 units in Shanghai in January as Chinese customs authorities started implementing a tariff cut package.
The People's Daily reported on Monday that Shanghai Customs also posted a 161.8 per cent jump in tariff revenues in January, to 105 million yuan (about HK$96.6 million), due to the imports surge, according to customs statistics.
Shanghai's port is one of six Chinese ports authorised by China's State Council to receive car imports. Late last year, China's State Council approved a tariff adjustment package to lower the country's overall tariff level by 6.6 per cent to an average of 15.3 per cent as part of China's pledge to the World Trade Organisation.
Among the cuts, China slashed its car tariff band rates from 80-100 per cent to 60-80 per cent, and reduced rates on imported car parts from 35-50 per cent to 30-40 per cent.
Passenger cars topped the car imports with 330 units due to the strong demand from private buyers, People's Daily said.
Analysts expected the import surge to force domestic car manufacturers to predict profits 15 per cent lower as they will have to lower their prices to compete.
People's Daily said domestic manufacturers enjoy an average profit margin of around 22 per cent largely due to tariff protection. But most of them, including joint ventures set up by Volkswagen and Citroen, have rushed to slash their prices to in order get a larger slice of the mainland car market.
About 610,000 cars were sold on the mainland last year.