The Car sales, specifically passenger cars continue to elevate as recorded in July. Sales boost up to 26.3% year-on-year to 1.6 million units – a tremendous growth in just over 30 months, according to China Association of Automobile Manufacturers. In the first seven months of 2016, sales went up 11 per cent to 12.64 million cars. Vehicle sales, commuter cars and business cars are also up to 9.84% counting around 14.68 million units in the first seven months.

China’s Policy Regarding Purchase Tax on Cars

The reason behind the major hike in car sales is because of the government policy that cuts purchase tax on cars with having engines much smaller than 1.6 liters. Car sales rose up to an immense percentage of 38.6 that counts to 1.14 million vehicular units coming up to the total of 71 per cent in July.

The regulation began on the October of 2015 setting up two goals in the process. The first one is to support Chinese car industry that turns out to create more cars with smaller than usual engines than their overseas competitors. The advantage to this is it lessens air pollution as small engines don’t emit large particles of pollutants.


Chinese brands seem to build a stronger foundation where sales are getting higher at the percentage of 27.6 which tallies up with 634,000 units of cars in July, slathering a 39.6% in their market shares.

SUV’s rising sales

SUVs, with having a rapid growth segment, up their sales to 57% which sold 628,000 units. Another company who imposed a faster growth in sales is New Energy Vehicles garnering a massive amount of percentage of 93% to 38,000. NEV specializes in electric vehicles and plug-in hybrid electric vehicles.


The most famous sub-segment is the compact SUVs that is the sole reason of the hike of SUVs which is market-driven. The Chinese care industry are profiting massively because they picked up the opportunity first hand, and made it possible to process and launch a handful of brand new automobiles given the short time. The segment is of essential importance for Chinese car producers, with compact SUVs exceeding half of their expected total sales.

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