Chinese buyers looking to purchase luxury cars or supercars costing 1,3 million yuan ($189,000) or more will also need to pay a 10% tax starting today, according to the Ministry of Finance.
This decision aimed at “super luxury” vehicles such as the Ferrari GT4Lusso, Bentley Bentayga or the Aston Martin DB9, is meant to “guide reasonable consumption”, lower emissions and save energy.
The 10% tax is China’s latest attempt at toning down spending by the country’s growing ranks of wealthy consumers, as reported by Autonews.
“The tax increase is a display of the government’s attitude of advocating frugality,” said Cui Dongshu, secretary-general of the Passenger Car Association. “The increase in taxes on luxury cars may help make the extension of the small-car tax cut more likely given it is in line with the government policy of promoting cars with better fuel economy.”
According to analysts and automakers alike, the higher tax will only have a limited impact on mainstream luxury buyers, seen as how brands like Mercedes-Benz, Audi and BMW still dominate China’s premium car market and wealthy consumers will likely not be put off by the relatively small 10% increase.
“The majority of our business will not be impacted. But because this was just announced yesterday, we are still evaluating to see what impact we might see on our business,” stated a Beijing-based BMW spokesman. He also added that only a “small portion” of BMW cars being sold in China are priced above 1.3 million yuan.
For Audi, only 1% of their deliveries in China cost more than 1.3 million yuan, which means effects on deliveries should be limited, according to the German manufacturer.
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