The automobile industry's tax reduction plan has been submitted to the State Council and may be launched after the Spring Festival. On the afternoon of New Year's Day 2009, Premier Wen Jiabao, while inspecting Qingdao Port, stated that adjustment and revitalization plans for the steel and automobile industries had been formulated. According to the latest information obtained by reporters yesterday, this plan might be scheduled for release after the Spring Festival.
It is understood that the "Automobile Industry Revitalization Plan" has been submitted to the State Council by the National Development and Reform Commission (NDRC). Since it involves multiple departments such as the Ministry of Industry and Information Technology (MIIT), the State-owned Assets Supervision and Administration Commission (SASAC), the Ministry of Commerce, the People's Bank of China, and the State Administration of Foreign Exchange, it requires coordination and approval by the State Council before being officially announced.
The introduction of the "Automobile Industry Revitalization Plan" aims to ensure that the automobile market maintains growth of around 10%. Industry experts analyze that in the plan, reducing or exempting purchase taxes based on engine displacement, as well as supporting auto finance and auto loans, are aimed at stimulating demand in the car market and boosting auto consumption. Encouraging new energy vehicles and requiring a certain proportion of domestically-branded vehicles in government vehicle procurement serve as a foundation for industrial structure adjustment.
However, an unnamed industry organization person believes that the specific launch time of the policy might be chosen after the Spring Festival.
[Related News] Delayed car registration appears due to anticipation of purchase tax adjustments. Another report indicates: Although the car market remains bleak at the end of the year and the beginning of the next, Beijing's automobile market has seen a "small peak" of prosperity during the winter. Upon closer inspection, some consumers are looking at cars but not buying them, buying cars but not picking them up, and picking up cars but not registering them. Expectations regarding the new purchase tax scheme and considerations about car price retention have made these behaviors quite prevalent.
[Related News] Eighty percent of respondents said they would definitely buy small-displacement cars if purchase taxes were reduced. Another report states: At the end of 2008, the National Passenger Car Market Information Association submitted a proposal to rescue the automobile industry to the National Development and Reform Commission (NDRC), the Ministry of Finance, MIIT, and the Ministry of Commerce. In the section on "how to promote automobile market development," it specifically mentioned lowering purchase taxes. Secretary General Rao Da of the association stated that there is a possibility of implementing automobile purchase tax reductions.
According to the association's plan, the main focus of the automobile purchase tax reduction is on small-displacement cars, emphasizing environmental protection and energy saving. So, can reducing purchase taxes for small-displacement cars stimulate consumer purchases of such cars? Last week, the reporter conducted a survey, and the results showed that nearly eighty percent (78.5%) of readers indicated that if purchase taxes were reduced, they would definitely buy small-displacement cars, a proportion higher than expected by the market.
In the survey, 78.5% of readers stated that "adjustment of purchase taxes would definitely lead to purchasing small-displacement cars." Additionally, 13.6% of readers indicated that they would consider buying small-displacement cars, with less than one-tenth of readers indicating that they would not choose small-displacement cars due to purchase tax reductions.
The questionnaire also surveyed two purchase tax adjustment schemes proposed by the association, and the results showed that "gradual taxation based on engine displacement" was more popular among readers than "direct exemption of purchase taxes for models below 1.5 liters." Seventy-one and a half percent (71.5%) of readers hoped for gradual taxation based on engine displacement, with 28.5% further proposing detailed plans, hoping for "not only based on displacement segments but also evaluating actual fuel-saving performance for graded taxation." Only 28.5% of readers supported directly exempting purchase taxes for models below 1.5 liters.
The questionnaire also investigated whether readers would change their car purchase timing due to purchase tax adjustments. The results showed that nearly eighty percent (78.6%) of readers might change their car purchase timing due to purchase tax adjustments, with 57.2% indicating that they would definitely change their timing because of the adjustments. Only 21.4% of readers indicated that they would not change their car purchase timing due to purchase tax adjustments.