Car sales enjoy record November
Customers rush to benefit from purchase tax waiver scheduled to expire at the end of this month. 2.94 million cars sold in the month, a 16.6pc annual increase
Chinese car sales hit a record high in November, driven by strong demand from consumers rushing to benefit from a purchase tax waiver which is scheduled to expire at the end of this month.
Carmakers sold a total of 2.94 million car in November, an increase of 16.6 per cent from the previous year, the government-backed agency China Association of Automobile Manufacturers (CAAM) said on Monday.
The figure, which grew by 10.9 per cent from a month earlier, set a new monthly sales record, the CAAM said in a statement.
In the first 11 months of this year, 24.95 million cars were sold, a 14.1 per cent increase from the year before, while the growth pace was 10.8 percentage points higher than of the same period of last year.
Zhang Zhiyong, an independent car industry analyst in Beijing, said customers flocking to buy cars before the expiration of the purchase tax waiver was the main driver of the strong sales.
However, the advance purchase will cast doubt on the car sales growth in the next two years, Zhang said.
Millions of Chinese buyers have scrambled to order cars since Beijing last October slashed the purchase tax in half on small-engine vehicles in order to reinvigorate the multi-trillion dollar auto market.
“Customers have placed orders in advance as they wanted to take advantage of the tax waiver. If the incentive does not extend, sales growth will see significant drop next year and 2018,” he said.
The 10 per cent purchase tax was cut to five on vehicles with engines of 1.6-litre or smaller after a significant slowdown in sale. The tax break will be expired on December 31.
Sales of those small-engine vehicles in the first 11 months grew by 22.5 per cent to 15.63 units from the same period of last year, while the overall passenger car sales growth was 15.6 per cent.
Despite mounting pressure from the industry for an extension of the tax waiver, Ye Shengji, deputy secretary-general of CAAM, said the government authorities have not given any indication on extending the incentive.
The agency has reported carmakers’ views to the National Development and Reform Commission and the Ministry of Industry and Information Technology, while pending a feedback, Ye said.