Chinese car market could stagnate / shrink for the first time in years

blackwasp · 18th October 2018, 17:56

The China Automobile Dealers Association (CADA) has proposed to the Chinese government to reduce taxes by over 50% amidst concerns of a slowdown in the world’s largest car market.

According to a media report, the Chinese Auto dealers are concerned about the reducing car sales numbers. It is reported that in the current year, the total car sales could fall for the first time in decades. Dealers have been reported to be struggling to maintain monthly sales volumes as they face cash flow problems as well as pressure from manufacturers.

In China, buyers pay 10% purchase tax on all new cars. The CADA has proposed a reduction of tax on cars with engine capacities of 2,000cc or lower. In 2016, China gave a tax rebate on small-engined cars, leading to a growth in sales.

Chinese car market could stagnate / shrink for the first time in years-chrysler-300c.jpg

Source: Reuters

Link to the Team-BHP News

Thermodynamics · 18th October 2018, 19:26

Historical Sales # (source)

Chinese car market could stagnate / shrink for the first time in years-31f2058f09ea45a8af21975c66b456a4.png

The slump

Chinese car market could stagnate / shrink for the first time in years-348723a97061424a9f95a24a19cd0948.png

It looks like the exponential rate is undergoing a transition to a somewhat mellowed down form. Not just the automotive, a lot of other industries for example Petrochemicals have been day dreaming of the next great market as China. The present slump in demand and the nervousness over trade war is quite concerning.

Quote:

Originally Posted by blackwasp

In China, buyers pay 10% purchase tax on all new cars. The CADA has proposed a reduction of tax on cars with engine capacities of 2,000cc or lower. In 2016, China gave a tax rebate on small-engined cars, leading to a growth in sales.

10% ?? that’s all ? and they are bawling over it. Wonder what would happen if they are charged 43% GST plus 15% Road tax. May be the numbers would then shrink down to Indian levels.

landcruiser123 · 18th October 2018, 21:10

Quote:

Originally Posted by Thermodynamics

10% ?? that’s all ? and they are bawling over it. Wonder what would happen if they are charged 43% GST plus 15% Road tax. May be the numbers would then shrink down to Indian levels.

This is like our road tax, which is paid at the time of sale. I’m sure the manufacturers will have to pay a separate tax.

But yes, cars are seen as a ‘premium’ thing by the Indian government and milked (taxed heavily) compared to many places in the world.

GTO · 22nd October 2018, 13:29

More than shrunk, I think China's car market might have hit its peak for the time being. App-based cabs, worsening traffic, work-from-home options, 2-wheelers (including cycles) & a changing culture where the youth are more interested in gizmos than cars is putting a lot of stress on the auto industry.

That said, make no mistake, despite having stagnated, the Chinese car market is HUGE. Think like 7 - 8 times the size of the Indian car market.

18th October 2018, 17:56	#1
blackwasp Senior - BHPian Join Date: Apr 2015 Location: Navi Mumbai Posts: 2,974 Thanked: 26,325 Times View My Garage	Chinese car market could stagnate / shrink for the first time in years The China Automobile Dealers Association (CADA) has proposed to the Chinese government to reduce taxes by over 50% amidst concerns of a slowdown in the world’s largest car market. According to a media report, the Chinese Auto dealers are concerned about the reducing car sales numbers. It is reported that in the current year, the total car sales could fall for the first time in decades. Dealers have been reported to be struggling to maintain monthly sales volumes as they face cash flow problems as well as pressure from manufacturers. In China, buyers pay 10% purchase tax on all new cars. The CADA has proposed a reduction of tax on cars with engine capacities of 2,000cc or lower. In 2016, China gave a tax rebate on small-engined cars, leading to a growth in sales. Source: Reuters Link to the Team-BHP News Last edited by blackwasp : 18th October 2018 at 17:58.
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22nd October 2018, 13:29	#4
GTO Team-BHP Support Join Date: Feb 2004 Location: Bombay Posts: 70,546 Thanked: 300,788 Times View My Garage	Re: Chinese car market could stagnate / shrink for the first time in years More than shrunk, I think China's car market might have hit its peak for the time being. App-based cabs, worsening traffic, work-from-home options, 2-wheelers (including cycles) & a changing culture where the youth are more interested in gizmos than cars is putting a lot of stress on the auto industry. That said, make no mistake, despite having stagnated, the Chinese car market is HUGE. Think like 7 - 8 times the size of the Indian car market.
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