China unveils plans to spur car demand

BEIJING, July 07 (Reuters): China announced on Thursday a raft of new steps to spur consumer demand for cars, saying it would consider extending a tax break for electric vehicles and outlining plans to build more charging stations and encourage lower charging fees.
The plans, announced by the Ministry of Commerce as part of a joint statement with 16 other departments, boosted shares of Chinese automakers, with Geely surging 6 per cent and Great Wall Motor rising 4 per cent.
The world's largest car market has been hit hard in recent months by stringent lockdowns in Shanghai and other parts of the country to curb the spread of the Omicron coronavirus variant.
As part of the new efforts, authorities last month halved the auto purchase tax to 5 per cent for cars priced under 300,000 yuan ($45,000) with 2.0-litre or smaller engines.
Buyers of certain fully electric and partly electric vehicles have not had to pay the purchase tax since 2014. A plan to reinstate it next year may now be scrapped, the ministry said, confirming a stance first flagged last month by the country's cabinet.
The halving of the tax has helped the market rebound with June passenger car sales jumping 22 per cent from a year earlier to 1.9 million units, according to preliminary data from an auto association.