Published By : 11 Sep 2015 | Published By : QYRESEARCH
China’s state-backed automotive association is asking the government to present stimulus measures after the downfall of sales of the vehicles for a fifth consecutive month due to a stock market collapse. The association lately suggested the government to cut the tax on vehicles by half, i.e. half of 10% tax. According to Shi Jianhua, the deputy secretary general of the China Association of Automobiles, the state-backed automotive association also suggested the government to raise limitations on number of new vehicles that people can purchase. Further, the government was suggested to accelerate the replacement of older vehicles in order to boost the demand for the automotive market across all the regions.
Shi told the reporters that in order to build a stronger auto industry in all regions, people should help the government to boost the demand. However, Shi did not elaborate the response from government in the monthly briefing meeting that was held in Beijing. Vehicle demand is closely related with the investment in infrastructure, and economic growth, Shi added. Automobile demand has recently been damaged due to efforts taken to control air pollution and reduce energy consumption. China released stimulus measures in the middle of global financial crises.
According to the reports published by Bloomberg, from Ward’s Automotive Group in U.S. and China Automotive Information Net, China faced competition from the U.S. auto industry as U.S. residents purchased more passenger vehicles as compared to China, which was a rare situation in nearly six years. For the second consecutive month, in August, China was trailing the United States in passenger vehicles section of the automotive industry.
It is too early to forecast whether China will again be trailing to the United States, in terms of passenger vehicles, this year. If it does, it would be the first ever decline for China in more than ten years, said Shi.