China to cut tariffs for cars, auto parts

2017 Ford F-150 Raptor SuperCrews being shipped to China

In what could prove to be a major turning point in China’s tough stance on trade in the auto sector, China’s Finance Ministry on Tuesday confirmed cuts for import tariffs on cars and car parts.

Due to roll in from July 1, the cuts will see tariffs on most vehicles reduced to 15 percent, and on certain parts reduced to 6 percent. Many cars imported into China currently have tariffs as high as 25 percent imposed on them.

The news comes a month after China announced it would move to scrap ownership limits on foreign automakers by 2022. It would mean foreign automakers could wholly own production facilities in China and potentially buy out the joint ventures they’re currently forced to participate in for local production.

The strict rules were originally put in place to nurture the local industry by restricting imports. The reduction of the tariffs signifies not only an attempt by the Chinese government to open up the local market but also that the local industry is now in a better position to challenge foreign competition.

Imports represent only a small fraction of the new car market in China. Out of the approximately 28 million vehicle sales in China in 2017, 1.21 million were imports, according to data from the China Automobile Dealers Association.

Check Also

You’ll soon be able to compare safety of electronic driver aids across vehicles

Most major automakers offer electronic driver aids these days, some of which like Tesla's Autopilot can control the steering of a car. However, the performance levels of driver aids vary across brands and road conditions, in some cases dramatically. Currently, there's no independent body that compares the performance of driver aids of different vehicles...

Elon Musk isn’t kidding, Tesla board confirms TSLA could go private

Elon Musk disrupted multiple industries on Tuesday when the Tesla CEO [NYSE: TSLA] took to Twitter to float the idea of taking the Silicon Valley automaker private. Musk mused Tesla could be bought back at $420 per share. On Wednesday morning, multiple members of Tesla's board of directors signed a statement that confirmed Musk was serious about taking...