China’s state-supported automotive association has decided it was high time for some lobbying work, asking the government to deliver incentive measures after sales have crumbled over the past five months.
The dwindling economy – tipped to grow at its slowest pace in 25 years – corroborated with the recent stock market rout have led vehicle sales to negative results for five consecutive months. The association has asked the government to lower the 10 percent tax on vehicle acquisitions, increase the plateau on the number of autos motorists can purchase and speed up the replacement of older cars to incentivize new vehicle sales, said Shi Jianhua, deputy secretary-general of the China Association of Automobile Manufacturers.
“To build a strong auto nation, we need the government’s help to boost demand,” commented Shi in Beijing, as it briefed the media on sales data. “Vehicle demand has a close correlation with economic growth and infrastructure investment. Auto demand has also been undermined by efforts to contain pollution and curb energy consumption.”
Such lobbying practice from the trade group showcases the urgency and issues that have been impacting automakers and their sales networks, which said profits have been dropping like a rock as they introduced unprecedented discounts during the first six months of the year. China last resorted to such incentive measures during the global financial crisis and the move helped the country become the largest auto market in the world, passing the United States back in 2009.