Volkswagen, Daimler shares soar as China proposes 50% car tax cut
The bold plan by the country’s top regulator is designed to mitigate the impact of the trade war and a slowing economy on the world’s biggest car market
Beijing — China’s top economic planning body is proposing cutting the tax levied on car purchases by half, according to people familiar with the matter, as the impact of the trade war and a slowing economy drags on demand in the world’s biggest car market. Shares of carmakers like Volkswagen and Daimler surged. The National Development and Reform Commission (NDRC), which also acts as China’s top regulator, submitted a plan to a group of key policy makers to cut the purchase tax to 5% from 10% for passenger vehicles with engines no bigger than 1.6l, the people said, asking not to be identified because the information is not public. No decision had been made on implementation, they said. Volkswagen, which last year sold about 39% of its vehicles in China, rose 6% to €145.04, the biggest intra-day gain in more than two years, and traded up 5.3% at 11.12am in Frankfurt trading. BMW and Mercedes-Benz maker Daimler, which counts China as their biggest market, also rose sharply. The NDRC d...
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