China October Auto Sales Up 11% After Tax Cut Boosts Demand
6 November 2015
Source: Bloomberg and IRCo
Passenger-vehicle sales in China increased at the fastest pace in seven months after the government cut a tax on car purchases to boost sagging demand in the world�s largest automobile market.
In October 2015, retail deliveries of cars, SUVs and multipurpose vehicles rose 11.3% to 1.85 million units, the biggest monthly gain since March 2015, according to the China Passenger Car Association.
Effective through the end of next year, the tax cut lowered the levy on vehicles with engines 1.6 liters or smaller by half to 5 percent. China last unleashed stimulus measures in the midst of the global financial crisis, when car-buying subsidies helped push the country past the U.S. in annual sales in 2009.
The latest stimulus package on the tax cut from the Chinese government will support the growth of its automobile sector in the fourth quarter of 2015 (4Q15) up to end of 2016. The improvement of China�s automobile sales will increase the natural rubber and synthetic rubber demand in 4Q15 and throughout 2016 as NR and SR are the main raw materials for tyres.