Dark Side of China’s Car Tariff Cuts
A more open market means lower prices.
China’s car market is crowded and the throngs are still pouring in.
Photographer: Feng Li/Getty Images
As the doors creak wider open, every automaker has its sights set on China. The world’s largest car market is ostensibly the future of industry profits. That promise is now under threat, though.
Beijing said this week it will reduce the long-held 25 percent tariff on imported cars to 15 percent and slash levies on auto parts to 6 percent from as high as 25 percent. Benevolent as that may look amid the current protectionist trade rhetoric, it won’t move the needle much beyond allowing the likes of BMW AG and Toyota Motor Corp. to sell a few more high-end models. Imports account for only around 5 percent of Chinese vehicle sales.