China unveils more plans to spur car demand

China on Thursday announced a raft of new steps to spur consumer demand for cars, saying it would consider extending a tax break for electric vehicles and plans to remove some restrictions on second-hand car sales.

The Ministry of Commerce made the announcement as part of a joint statement with 16 other departments including the finance and industry ministries.

As part of the new efforts, authorities last month halved the auto purchase tax to 5 percent for cars priced under 300,000 yuan (US$45,000) with 2.0-liter 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.

But the ministry statement did not make a mention of any extension of subsidies for what China calls new energy vehicles – a program that has been credited with supercharging the sector's growth.

The commerce ministry also said it would encourage the replacement of older vehicles and increase credit support for car purchases.