The China Automobile Dealers Association (CADA) is in talks with the finance and commerce ministries over cutting existing car purchase taxes by up to 50%, members of the association told Reuters.
The commerce ministry met with representatives from the auto industry earlier this week to brainstorm means of revving up demand as fears of a slowdown in sales mount, according to the sources.
“The overall car market is weak this year. Dealers I know are struggling to maintain their sales volumes as they feel pressure from both car makers and cash flow,” said one CADA official.
CADA has been similarly consulted on previous occasions, such as in 2016 when the purchase tax was last cut and China surged forward as the world’s largest auto market.
One source said that the association was asking for the 10% purchase tax to be halved on cars with a 2.0 litre capacity of below. No specifics on the commerce or finance ministries response were given.