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Luxury car dealers halt sales before tax hike

(Xinhua)
Updated: 2008-08-18 09:12

Dealers of imported luxury cars with big engine capacities are halting their sales and seeking higher prices before the passenger car tax rise is to finally start on September 1, locally based paper Beijing Times reports.

An analyst with China Automobile Trading Co Ltd said the import price of cars with engine capacities of 3 to 4 liters would be increased by 13 percent, and 33 percent for those above 4 liters, as a result of the new tax, brought in to promote oil-friendly cars and reduce oil consumption.

To beat the tax consumers may buy now, causing luxury car dealers of brands like BMW to temporarily halt their sales until the tax comes into force.

According to one BMW car dealer in Beijing's eastern Chaoyang District, the company was only selling domestically produced Huachen BMW, and a booking service for imported BMWs with big engine capacities was currently not provided, the paper reported.

The tax rise would have the biggest impact on auto producers from the European Union and Japan as luxury cars mainly came from those two regions, according to customs figures.