Published By : 10 Sep 2015 | Published By : QYRESEARCH
The auto association in China is stressing the government to implement stimulus measures after vehicle sales registered further dip with the recent stock market crash. China Auto Association has suggested the government to reduce the 10 percent tax on vehicle purchases by half, along with raising the limit on number of new cars purchased by consumers. According to Shi Jianhua, the deputy secretary-general of the China Association of Automobile Manufacturers, accelerating the replacement of old automobiles by the government would bolster the demand for new vehicles. He has not mentioned anything about the government’s response on the suggestions.
Shi further mentioned that the demand for vehicles depend on infrastructure investment and economic growth. The demand for automobiles in China has dipped significantly with the government’s efforts to reduce energy consumption and pollution. The lobbying by the China auto association reflects the growing unease among the automobile manufacturers and retailers regarding slowing demand. To attract consumers, auto manufacturers have slashed their prices significantly. However, that has not picked up demand. The Chinese government had last introduced stimulus measures during the global financial crisis in 2009 when subsidies for car purchase boosted the country’s automobile sector.
For the first time in last six years, the U.S. consumers purchased more vehicles than their Chinese counterparts. The sales data in July reflected that China trailed behind the U.S. in passenger vehicles sales. Shi has pointed that right now it is too early to forecast whether China would record an annual drop in automobile sales. If that happens, it would be the first decline in more than ten years.