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SHANGHAI/BEIJING, Feb 8 (Reuters) – China’s passenger car sales fell 37.9% in January, an auto industry body said on Wednesday, as demand weakened after a tax cut on combustion engine vehicles and electric-vehicle subsidies expired.
Sales of new energy cars, including purely electric cars and plug-in hybrids, fell 6.3% in January, accounting for a quarter of the total 1.3 million car sales in the month, CPCA data showed.
Chinese people also celebrated a full week of the Lunar New Year holiday in the month, making it a quieter January compared with previous years.
Despite of signs of easing demand in the world’s largest car market, China’s central government did not extend a 50% purchase tax cut on combustion engine vehicles when it expired at the end of December.
It also decided to end a more than decade-long national subsidy for electric vehicle purchases, forcing automakers including Tesla to deepen discounts to defend their market shares.
China’s auto market is more reliant on various of incentives from local governments to encourage purchases. Shanghai extended a 10,000-yuan rebate for those who exchange their oil cars for electric ones while cities of Zhengzhou, Wuxi, Shenyang and Beijing issued coupons for auto consumption. (Reporting by Zhang Yan, Brenda Goh and Beijing newsroom; Editing by Andrew Heavens and Louise Heavens)
