China Car Sales Rise 20% as Buyers Rush to Beat Expiring Tax CutBloomberg News
Sales climbed to 2.42 million units last month, PCA data shows
Industrywide deliveries increased 16% in first 11 months
China’s passenger-vehicle sales rose for a ninth consecutive month as consumers rushed to buy small-engine autos before a tax cut is due to expire at the end of the year, boosting deliveries at local carmakers including Geely Automobile Holdings Ltd. and Guangzhou Automobile Group Co.
Retail sales of cars, sport utility and multipurpose vehicles to dealerships climbed 20 percent to 2.42 million units in November, according to the China Passenger Car Association. Deliveries rose 16 percent to 21.1 million units in the first 11 months.
Buyers of small-engine cars in the world’s biggest auto market continued to bring forward their purchases to qualify for a tax cut that’s expiring at the end of this year. While a decision on the extension is awaited, the government this month slapped an additional 10 percent levy on vehicles such as Ferrari GTC4Luzzo and Bentley Bentayga costing more than 1.3 million yuan before a value-added tax as it sought to combat conspicuous consumption and promote more efficient vehicles.
“As long as the government doesn’t say anything about carrying the tax cut beyond this year consumers would assume it will run out this month and act on that assumption,” said Huang Xiaowei, an analyst with Shenzhen-based WAYS Consulting Co. “The government is weighing whether to extend the policy and timing of the announcement is quiet sensitive in policy releases like this.”
The sustained demand for cars with engine 1.6 liter or smaller has helped clear inventory at dealerships, according to China Automobile Dealers Association.
Geely posted the fastest sales growth among major local automakers with its deliveries almost doubling to 102,422 units led by demand for its New Emgrand cars, while Guangzhou Auto’s sales climbed 34 percent to 174,354 units. Great Wall Motor Co., China’s biggest maker of sport utility vehicles, boosted deliveries 43 percent to 129,087 units.
— With assistance by Ying Tian