Passenger vehicle sales in China plunged 28% year-on-year in the first 18 days of January, reports Caixin. This comes as policy support faded and new taxes dampened consumer sentiment.
Retail passenger car sales slid to 679,000 units from January 1 to 18, according to figures released Wednesday by the China Passenger Car Association (CPCA). New-energy vehicles (NEVs)—a category that includes electric and plug-in hybrids—fell 16% to 312,000 units.
CPCA Secretary General Cui Dongshu said the decline exceeded expectations and blamed the contraction largely on a shift in government policy. Since January, the long-standing purchase tax exemption for NEVs—first introduced in September 2014—was halved, requiring consumers to now pay a 5% tax on purchases.