Sales of small engine cars boom
In China small engine cars sales are experiencing a boom. It's thanks to expectations that a preferential tax policy could be ending.
In China's northeastern coastal city of Dalian, smaller engine, or small displacement, cars seem to be flying out of sales lots.
Xia Shicheng, one salesperson said "In November our sales of small displacement cars went up by 40 percent more."
The boom is due to the widely anticipated cancellation of a preferential tax policy for the purchase of cars with smaller engines.
If it is cancelled, car buyers will have to pay a full tax of 10 percent, a considerable sum of money of buyers.
Liu Na, one salesperson said "Buying a small displacement car now, one could save 2000 yuan."
Sun Xiuwei, one car buyer said "I want to buy a car by the end of this year, as the preferential policy will be probably cancelled next year. This could save me about two thousand yuan."
The tax policy was first introduced in early-2009 as a government initiative to boost auto sales and encourage purchases of cars with smaller engines.
The tax discount rate has now been halved to 25 percent, from its initial rate of 50 percent.
