China's Proposed Car-Tax Cut Brings Relief to Investors, Dealers
- Planning body is said to suggest tax cut to 5% from 10%
- Great Wall, Geely, Guangzhou Auto lead Chinese automaker gains
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The prospect of China injecting stimulus into its moribund car market triggered a surge in automakers’ shares from Europe to Asia. But overseas investors aren’t the only ones cheering the chance of a 50 percent cut to the tax on vehicle purchases.
On the ground in China, car dealers have been hurting as the trade war with the U.S. hit consumer demand and raised prices for imported brands, putting sales on course for their first annual drop in more than two decades. The country’s economic planning body is proposing the tax cut to revive the flagging market, people familiar with the matter told Bloomberg News. The odds are good if history is any guide, with sales accelerating after a similar move in October 2015.