Car import duty in China reduced by 10 percent

Car import duty in China reduced by 10 percent

KUALA LUMPUR: Considering the fact that China is one of the fastest growing automobile markets, it is pretty evident that their Government focuses more on dwelling this particular segment. It seems the Chinese Government is smartly handling the case and that's why it decided to reduce tariff rates for car imports by 10 percent starting July 1, 2018.

CAR IMPORT DUTY IN CHINA

The Government believes that this move will surely lure more and more automobile manufacturers to take their business to new heights, especially the foreign players. This move has brought the import duty to a justifiable rate of15 percent from the erstwhile 25 percent, due to which the luxury car makers were forced to price their vehicles at exorbitantly high price points. This move is massively appreciated because China is one of the key markets for the fast-paced development of future mobility, i.e., electric vehicles.

CAR IMPORT DUTY IN CHINA REDUCED TO 15%

In the past, various biggies from the Western nations such as Elon Musk and Donald Trump opposed such high import duty on automobiles in China. This move by the Chinese Government has brought it closer to American, and European Union norms were import duties are levied at 2.5 percent and 10 percent respectively, on foreign-made cars. Though the import duty imposed by China on foreign manufactured vehicles is still high, this move is seen to be encouraging. Taking in the fact that even with 25 percent of import duty, almost 23,900,000 cars were sold in China, which is almost double than that sold in the entire European Union.

With this move, the Chinese Government can introduce more reforms, one of them is gradually abolishing the infamous long-standing ownership limits for car companies in the country. As per this agreement, a foreign-based car maker can produce cars in China only with a mutual agreement or joint venture with a China-based car maker, as seen in ventures like Chery Jaguar Land Rover and FAW-Volkswagen.

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