1.6-liter vehicles’Acquisition Tax

At the dawn of the New Year, can the prosperity of domestic auto market be extended?

Yesterday, Chang Xiaocun, the director of the Market System Construction Division of the Ministry of Commerce has expressed at the press conference under the theme of expanding consumption that the there is still room for consumption growth of Chinese auto market. Relatively, there is also space for the policy adjustments.

Among various policies promoting the consumption, whether the Automobile Acquisition Tax of cars with a displacement of 1.6-liter or less can be continuously cut down by half become the focus of auto market.

The implementation of this policy at the beginning of this year has brought about the prosperity of domestic auto market. Therefore, Chinese auto sales have climbed up to be the first under the financial crisis when the global auto sales are declining. The sales of demotic auto market may reach 13 million units by some estimation.

In response, Chang Xiaocun has expressed that actually the sales performance will be better throughout the year. In addition to the 50% discount of Automobile Acquisition Tax, he also considers that old for new policy to play an important role at the second half of this year.

Chang Xiaocun has also revealed that the continuation of these policies to promote automobile consumption is under consideration by the relevant departments. This year as the government has expanded investment in fixed assets and the foreign trades start to decline, there will still be pressure to promote economic growth by stimulating consumption next year. So the government will extend a variety of purchase incentive policy as they consider maintaining the prosperity of auto market.

Earlier, a saying is being spread within the automobile industry that purchase tax preferential policies will continue to be carried out next year though there will be some adjustments. Till then more car models will be incorporated in.

It is reported by First Financial Daily that ministries participated in including the Ministry of Finance and Development and Reform Commission has already reached a consensus on this matter. Currently there are two options: the first is to carry on the standard of this year that various preferential policies are implemented according to different displacement. In principle, cars with less displacement will enjoy more tax concessions; the second measure is to take the fuel consumption level as a standard. Now the research work on the actual fuel consumption data of all types of passenger cars in the market has already been completed.

In addition, though the old for new policy led by the Ministry of Commerce started late this year, it has driven 1 billion Yuan sales two months after the implementation. Chang Xiaocun said the policies to stimulate consumption of the Ministry of Commerce next year would be focused on the transformation of the second-hand car market and the expansion of vehicles to the countryside.

At present there are more than 500 second-hand car markets within the whole country. By the end of the November, trading volume is 3 million units. The Commerce Department thinks this figure is far too small compared to the international figures. In the international markets, the second-hand cars in trade are 3.5 times of the new cars sold. The 3 million second-hand cars only account for 27% of the sales volume of new cars. So it can be concluded that there is still room for growth. At present, the Market System Construction Division of the Ministry of Commerce is focused on the upgrading and improvement of functions, information, and quality of service areas of the second-hand car markets.

In addition, this year the rural consumption significantly grows faster than the urban for the first time. The sales of rural auto market are possibly to exceed 2 million units, which is a growth of 80% compared with. Chang Xiaocun believes that golden time of vehicles in the rural areas is just coming. It can be a focal point to spur domestic demand.

From the overall perspective, the consumption growth of this year is also high in recent years. The total retail sales of social consumer goods this year is forecasted to increase about 15.6% as to motor vehicles, from the comprehensive statistics of the Ministry of Commerce and, from January to October, the national car sales has been 10.89 million units, with a growth of 37.7%.

Among them, the sales volumes of cars with a displacement of 1.6-liter or less 5.701 million units, which is 63.2% more compared to the same period in the last year. The growth rate of household appliances of the National wholesale and retail enterprises above designated size is 8.6%more than the first quarter of this year, driving the production of low-energy consumption washing machines, refrigerators, color TV to respectively increased by 11%, , 16.7% and 4.2%.（translator: Yalong/ Jessie）

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