Porsche, one of the most powerful sports cars in the world, may have a little less grunt on the mainland following a government policy discouraging gas guzzlers. Porsche, which makes 95 per cent of its cars with an engine capacity of three to four litres, will reduce the size of its engines for the market following Beijing's decision to levy a higher consumption tax on large vehicles. Helmut Broeker (right), the head of Porsche China, said the tax had lifted the retail price of the company's cars by up to 30 per cent and it had already lost some customers. Porsche chose April's Shanghai Auto Show to unveil its four-door, 4.8-litre, four-seat US$175,000 Panamera sedan, signalling the growing importance of the mainland market. Rival Rolls-Royce also unveiled its RR4, or the Ghost, in Shanghai. 'The Chinese market is extremely important [to Porsche],' said Broeker. 'It became the third-largest market for us last year after the United States and Germany.' Porsche sold 8,371 cars on the mainland last year, up from 4,856 in 2007. Broeker expected sales this year will be slightly higher than last year. The carmaker holds 14 to 15 per cent of the growing luxury vehicle market in China. It started its business on the mainland in 2001 with an initial market share of 2 per cent. But as a maker of fast and powerful cars, it has come up against efforts by Beijing to encourage fuel efficiency on the nation's roads. The Ministry of Finance announced in August last year that vehicles with an engine capacity of 4.1 litres or more will be taxed at a rate of 40 per cent of the retail price, up from 20 per cent. Vehicles with three to four-litre engines will be taxed at 25 per cent, up from 15 per cent. The tax on cars with one-litre engines or smaller will be lowered to 1 per cent from 3 per cent as the central government encourages people to buy low-emission vehicles. 'The 1.6-litre segment pushed total car sales this year,' said Broeker. 'But at a certain point, people will like to move up [with a different, more powerful car].' Domestic carmakers including Zhejiang-based Geely Automobile Holdings and Anhui-based Chery Automobile are expected to benefit from the consumption tax cut on economy vehicles. Other domestic firms including Shanghai's SAIC Motor Corp, Beijing Automobile Industry Corp and Guangzhou Automobile Industry Corp mainly focus on 2.5-litre engine cars - the most popular segment. Great Wall Motor, the Hebei-based sports-utility vehicle maker, is boosting efforts to sell cars as a way of accommodating the policy directive for smaller-engine cars. Growing vehicle sales on the mainland have caught the attention of global carmakers, with the top bosses of Daimler and Rolls-Royce appearing at the Shanghai Auto Show to market their new cars. Broeker said Porsche would invest more to expand its dealerships on the mainland to lift brand recognition.