Sales of passenger vehicles in China, including passenger cars, SUVs and MPVs, rose by 15.9% to 23.9m units in 2016 – according to the China Passenger Car Association.
The full-year outcome was ahead of the association's forecasts made earlier in the year and reflects government stimulus measures including a 50% sales tax discount on cars with engines of up to 1.6 litres.
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Sales peaked in December at 2.76m units, ahead of the government's plans to halve the discount at the beginning of 2017. The sales tax rate was increased from 5% to 7.5% at the beginning of January, but is still lower than the normal rate of 10%.
Demand for compact SUVs was particularly strong last year, with sales volumes rising by close to 44%. Domestic manufacturers benefited most from this sharp sales rise – particularly strong SUV brands such as Great Wall, which sold more than 580,000 Haval H6 SUV models last year according to local reports.
Industry analysts expect a sharp slowdown in the market's growth rate this year, with many buyers having already taken advantage of the low taxes. If the tax discount had been withdrawn altogether, many expect the market would have declined this year.
