Execs: Guzzler tax won't hurt China sales

Beijing -- China's new sales tax on big cars to battle the nation's notoriously dirty air will not significantly reduce sales, an auto import trade-group executive says.

The tax of as much as 40 percent will be shared by automakers and dealers, so buyers won't feel much of a bite and sales will therefore be only minimally affected, Ding Hongxiang, general manager of the China Trading Center for Automobile Imports, told Xinhua, China's official news agency.

State Information Center official Xu Changming said China's car market was expected to grow about 14 percent in next the four months, with nationwide sales topping 9.5 million units, excluding exports.

The sales tax on cars with engine capacities bigger than four liters were doubled to 40 percent in China Monday.

The tax on cars with engine capacities between three and four liters rose to 25 percent from 15 percent.

The tax on small cars, with engine capacities of one liter or less, were lowered to 1 percent from 3 percent.

The new policy is intended to "help restrain the production and sales of high-emission vehicles while promoting the production and sales of low-emission cars," China's Ministry of Finance said in announcing the plan last month.

China is the world's second-largest market for passenger cars.

Copyright 2008 by United Press International.