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China's auto sales seen to decline in January from December

Weak consumer demand and an increase in purchase tax are blamed for the expected drop in sales, survey reveals.

China's auto sales are set to drop in January from December last year on weak consumer demand and an increase in the vehicle purchase tax, according to a survey published by China Automobile Dealers Association today.

Around 42.5 percent of car dealers expected consumer demand to fall in January compared with December while 35.6 percent of them believed demand would stay flat and 21.8 percent said demand would increase, the survey revealed.

The association blamed the decline to an increase in the purchase tax for vehicles with engines below 1.6 liters. The Ministry of Finance has raised the purchase tax of small-engine vehicles from 7.5 percent last year to 10 percent this year.

Car dealers are eying lukewarm operating conditions generally in January as the survey revealed that 60.3 percent of the dealers expect normal operating conditions this month while 27 percent believe theirs will perform well and 12.6 percent see poor conditions. 

The survey covered most car dealers from the top 100 auto dealership groups with more than 1,000 stores in China.

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