China will sharply slash import tariffs for vehicles and car parts, opening up greater access to the world’s largest auto market in middle of an easing of trade tensions with the United States.
Import tariffs will be slashed to 15 percent from 25 percent for most automobiles from July 1, the Ministry of Finance stated on Tuesday, adding that this was part of efforts to open up Chinese industries and spur development of the regional auto sector. At present, a small amount of imported trucks are taxed at 20 percent.
Import tariffs for auto parts would be slashed to 6 percent from mainly around 10 percent, the ministry stated.
The move will be a significant boost to overseas automakers, especially helping premium brands including Germany’s BMW, electric automaker Tesla and Daimler’s Mercedes-Benz close a price gap on local competitors.
“Benefits are huge for our business, especially Infiniti,” stated a Yokohama-based executive at Nissan Motor referring to the Japanese company’s premium car brand.
Another executive at the company’s Chinese joint venture stated it was “great news” but that the biggest beneficiaries would probably be German luxury automakers, which also include Volkswagen‘s Porsche and Audi brands.
“That’s just because of the volume of imported cars they sell,” the person stated on condition of anonymity.
