CHINA would not extend tax incentives for small cars next year, domestic media reported yesterday. The government had moved to phase out stimulus measures that helped the country weather the global financial crisis.
The Central Government would also withdraw the 3,000-yuan subsidies for small fuel-efficient cars from Jan. 1, 2011, Chinese-language newspapers reported, quoting an unnamed official from the National Development and Reform Commission (NDRC), the country s top economic planner.
NDRC officials were not immediately available for comment.
The government cut the sales tax for cars with a 1.6-liter engine or smaller by half in 2009, a move that had significantly boosted automobile demand and helped China eclipse the United States as the world s biggest auto market that year.
The scale-back of the incentives since the beginning of this year is already seen by many industry insiders as a sign that they will be discontinued in 2011.
Many industry executives, including Kevin Wale, president and managing director of General Motors China operations, expect China s vehicle market to return to a more rational growth pattern next year, gaining 10-15 percent, after robust expansion in 2009 and early 2010.
But December car sales could accelerate rapidly as people rush to take advantage of policy incentives before they were scrapped, analysts said.(SD-Agencies)
