China’s NDRC proposes stimulus plan for auto industry
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SteelOrbis has learned that China's National Development and Reform Commission (NDRC) has recently submitted a stimulus plan for China's automotive industry to the State, aiming at a 10 percent growth of the domestic auto industry in 2009. The plan is to be formally promulgated in the first quarter of 2009.
Many stimulus measures are included in the scheme, such as reduction or removal of the vehicle purchase tax based on engine capacity, fostering of development of alternative energy vehicles, providing favorable credit conditions for the auto industry, and encouraging the acquisition and restructuring of domestic auto manufacturers.
The current tax rate for vehicle purchases in China stands at 10 percent. In order to reduce exhaust emissions and energy consumption, on the issue of tax reduction a degree of preference is proposed to be given to vehicles with smaller engine capacities. Two strategies are proposed; classification of different engine capacities on which the auto purchase tax would be based; and removal of the purchase tax on vehicles with small engine capacities.