China’s car sales struck a record monthly high in November as customers rushed to take advantage from a tax break prior to its scheduled expiration.
Foreign and domestic automakers provided 2.59 million passenger cars– consisting of sedans, crossovers and minivans– to dealers previous month, the government-backed China Association of Automobile Manufacturers informed on Monday, rise of 17% from in the year-earlier duration.
Although compared with a 20% increase in October, the speed of November’s gain represented an additional downturn from previous months, as customers continue to bring forward purchases to qualify for the tax break on small automobiles. The incentive is due to come to an end by this month.
China halved the 10% purchase tax on cars with 1.6-liter engines or smaller sized in October in 2015, following four straight months of sluggish sales. Car sales have ever since substantially rebounded. In the duration from January to November, China’s new-car sales hit 21.7 million cars, a 16% boost from the very same duration a year earlier, when sales increased 5.9% from the year before.
Market watchers are concerned that growth worldwide’s largest vehicle market might stall if the tax break isn’t really extended. China’s auto market is vital to worldwide auto companies as U.S. auto sales reduce and sales in other emerging markets such as Russia and Brazil diminish.
Ye Shengji, a deputy secretary-general of the auto-manufacturers’ association, that is calling for the tax break to be extended, stated Monday that the federal government had not given any indicator that it would extend the reward.
Citigroup stated in a recent note that if the tax break on small automobile purchases isn’t really extended, it expects development of the overall passenger car market to decrease to 4% in 2017 because of the comparative high base in 2016.
The majority of automakers have reported strong results for November and are expecting to publish record sales for this year. General Motors stated its China sales boosted 7% year-over-year, Ford Motor published a 17% gain, and Nissan Motor increased 11%.