Auto stocks surge on news China eyeing car sales tax cut
Authorities said to consider cut to 5% from 10%
After a report from Bloomberg that Beijing is looking at a 50% cut to a car sales tax, shares of major automakers surged on Monday.
General Motors, Ford, BMW and Daimler were all up as much as around 5% on the news.
The potential for tax relief in the world’s biggest auto market comes as the auto industry is under pressure from the Donald Trump administration’s trade war, and as growth in the China market slows.
The recent slowdown in Chinese car-sales growth has been attributed to a number of factors, including slowing economic growth and the market’s maturation.
Sources told Bloomberg that the move to cut the tax to 5% from 10% currently being considered would apply only to cars with engines no bigger than 1.6 liters.