Chinese auto market hit by cancellation of preferential policies

• Source: Global Times
• [17:55 January 13 2011]
• Comments

Sales volume of micro cars and low-emission cars reduced sharply since the government withdrew three main preferential policies: on purchase tax, scrappage schemes and subsidy policy for rural residents at the end of last year.

Orders of micro cars were halved while the sales volume of low-emission cars also reduced sharply.

In order to boost sales, many auto brands continued the purchase tax preferential policy with their own money – customers can apply for a compensation of 2.5 percent of the purchase tax from the automakers. The 3,000-yuan ($454) subsidy for low-emission cars is also good for the auto market.