market has good long-term potential, because vehicle penetration in the country, especially in rural areas, is low. And given that China’s aging population is ris
ing, a growing number of senior citizens could buy cars to enjoy better travel experience.
Since the age of fast and assured growth is over, those who don’t respond to market changes will
fail. And declining car sales may speed up the process of incompetent players being squeezed out of the market.
Modest increase in vehicle sales likely
Shi Jianhua, deputy secretary-general of China Association of Automobile Manufacturers
Unlike the tax cut on car purchases in the past, this year’s plan will not yield immed
iate results, as it is designed mainly to improve the overall market environment and produce long-term results.
The government introduced a preferential car purcha
se policy, which allowed smaller vehicles with 1.6-litre or less powerful engines to enjoy up to 50 per
cent tax cuts from September 2015 to 2017. The stimulus policy helped car sales grow at 7.1 percent year-on-year.