The automobile purchase 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 stated during his inspection of Qingdao Port that adjustment and revitalization plans for the steel and automobile industries have been formulated. According to the latest information obtained by reporters through interviews yesterday, this plan might be scheduled to launch after the Spring Festival.
It is reported that the "Automobile Industry Revitalization Plan" has been submitted by the National Development and Reform Commission (NDRC) to the State Council. Since it involves multiple departments including the Ministry of Industry and Information Technology (MIIT), SASAC, the Ministry of Commerce, the People's Bank of China, and the State Administration of Foreign Exchange, formal publication will only occur after coordination and approval by the State Council.
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 automobile finance and automobile credit policies, are aimed at stimulating demand in the car market and boosting automobile consumption. Encouraging new energy vehicles and mandating a certain percentage of domestically branded vehicles in government procurement lay the groundwork for industrial structure adjustments.
However, unnamed industry organization insiders believe that the specific release time of the policy might be selected after the Spring Festival.
[Related News] Delayed vehicle delivery and registration phenomenon appears in the car market, awaiting purchase tax adjustments. Another report indicates that although the end-of-year car market remains sluggish, Beijing's car market experienced a "small upsurge" in winter prosperity. Upon closer inspection, it was found that some consumers were looking at cars but not buying them, buying cars but not picking them up, and picking them up but not registering them. Expectations regarding the new purchase tax scheme and considerations about car price retention rates made these three behaviors very prevalent.
[Related News] Eighty percent of respondents say they would definitely buy small-displacement cars if purchase taxes were reduced. Another report states that at the end of 2008, the National Passenger Vehicle Information Association submitted a proposal to the National Development and Reform Commission (NDRC), the Ministry of Finance, MIIT, and the Ministry of Commerce suggesting measures to assist the automobile industry, specifically mentioning lowering purchase taxes under the section "How to Promote the Development of the Automobile Market." Secretary-General Rao Da of the Passenger Car Association (PCA) indicated that there is a possibility of implementing automobile purchase tax reductions.
According to PCA’s proposal, the focus of automobile purchase tax reductions would mainly be on smaller-displacement vehicles, reflecting themes of energy conservation and environmental protection. The question arises: could reducing purchase taxes on smaller-displacement vehicles stimulate consumer purchases of such cars? Last week, reporters conducted a survey on this issue. Results showed that nearly eight out of ten (78.5%) readers expressed that if purchase taxes were reduced, they would definitely buy small-displacement cars, a proportion much higher than expected by the market.
In the survey, 78.5% of readers said, "Adjusting purchase taxes would definitely lead me to buy a small-displacement car," while another 13.6% of readers indicated they would consider purchasing one. Less than one-tenth of the readers said they would not choose a small-displacement car even if purchase taxes were reduced.
The questionnaire also surveyed two proposed purchase tax adjustment schemes from the PCA. Results showed that "gradually levying automobile purchase taxes based on displacement" was more popular with readers than "directly exempting purchase taxes for models under 1.5 liters." Seventy-one and a half percent (71.5%) of readers hoped for automobile purchase taxes to be gradually levied based on displacement, among whom 28.5% further proposed detailed schemes, hoping for not only "displacement-based categories but also actual fuel-saving performance evaluations to determine graded taxation." Only 28.5% of readers supported directly exempting purchase taxes for models under 1.5 liters.
The questionnaire also investigated whether changes in purchase tax policies would alter readers' car purchase timing. Results showed that nearly eight out of ten (78.6%) readers might change their car purchase timing due to purchase tax adjustments, with 57.2% of readers definitely changing their timing because of purchase tax adjustments, while only 21.4% of readers saying they wouldn't change their purchase timing regardless of purchase tax adjustments.