Chinese car sales grew by a third in September. But incentives greased a fragile recovery by pulling demand forward, and drivers’ demand for gas guzzlers is weakening, says KatrinaHamlin
Some recent purchases represent pent-up demand after months of lockdowns. Buyers were also capitalising on new policies: Beijing extended tax exemptions for electric cars in August, soon after halving auto purchase taxes for smaller gas guzzlers.scheme, where drivers relinquished older motors in return for subsidised newer models, successfully invigorated sales without undermining the months that followed. However, in China, underlying demand seems soft.
Purchases of traditional engines, representing two-thirds of the market, are down by a quarter year-to-date, making life tough for marques such as VolkswagenRegister now for FREE unlimited access to Reuters.comAs incentives expire, cars could follow a similar route to China’s commercial vehicles. A combination of new regulations and Covid-19 stimulus encouraged buyers to upgrade in 2020. Battery-powered designs were especially popular.
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