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Chinese car market could stagnate / shrink for the first time

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

 
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