12:05 AM EDT, 06/01/2022 (MT Newswires) -- China halved the purchase tax for passenger vehicles priced under 300,000 yuan ($44,900) starting Wednesday as part of the government's measures to spur auto consumption, according to a notice from the State Tax Administration on Tuesday.
Eligible vehicles are those with engine displacements within 2 liters purchased from June 1 to Dec. 31, 2022.
The measure comes as the recent COVID-19 outbreaks in China hammered demand for cars in recent months.
In April, China's retail sales of passenger cars plunged 35.5% year over year to 1.04 million units, while output slumped 41.1% year over year to 969,000 units, according to earlier government data.
China's biggest local automakers include Dongfeng Motor Group (SHA:600006, HKG:0489), SAIC Motor (SHA:600104), Chongqing Changan Automobile (SHE:000625), BAIC Motor (HKG:1958), Guangzhou Automobile Group (SHA:601238, HKG:2238), Great Wall Motors (SHA:601633, HKG:2333) and FAW Group (SHE:000800).
The domestic new-energy vehicle market, meanwhile, is dominated by BYD, (SHE:002594, HKG:1211), Tesla China, GAC Aion, and SAIC-GM-Wuling, a joint venture among SAIC, General Motors and Wuling Motors Holdings (HKG:0305).