The FINANCIAL — China’s new-car sales rose 13% in October from a year earlier, the biggest gain in the past 10 months, boosted by a government-initiated incentive program that has lowered purchase costs for small cars, according to Nasdaq.
China sold 1.94 million passenger cars last month, up from 1.71 million in the year-earlier period, the government- backed China Association of Automobile Manufacturers said on November 11. Total motor vehicle sales rose 12% from a year earlier to 2.22 million units.
The Chinese government in late September slashed the 10% purchase tax in half on vehicles with engines smaller than 1.6 liters to revitalize the car industry. Nearly 70% of China’s new-car sales fall into the category that qualifies for the tax break, said the industry group.
The previous time China lowered the tax for small cars was in 2009, when the global financial crisis took a toll on demand for cars. That prompted a 53% surge in passenger-car sales that year, which helped China overtake the U.S. as the world’s largest auto market.
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