UPDATE 2-China car policy dents HK auto stocks; outlook firm

giovedì 10 dicembre 2009 11:58

* Some see higher small-car tax as surprise

* HK-listed automakers slump, mainland listed peers hold up

* China car sales seen growing at double-digit rate in 2010 (Recasts throughout with analysts, executives comments)

By Fang Yan and Alison Leung

SHANGHAI/HONG KONG, Dec 10 (Reuters) - Beijing's tweaking of its car purchase incentives surprised many as lacking in generosity, but analysts expect pent-up demand in smaller cities to keep the world's biggest car market growing by double digits next year.

China said on Wednesday it would raise the sales tax rate on small cars to 7.5 percent next year, a move that could save it roughly 10 billion yuan ($1.47 billion) a year, according to China's official auto industry association. [ID:nTOE5B80BG]

That is still lower than the 10 percent before Beijing halved the rate this year on cars with 1.6 litre engines or smaller, fuelling a 50 percent spike in car sales in the year to date.

But many automakers had hoped Beijing would maintain the generous stimulus beyond the planned Dec. 31 expiry, with some even anticipating the preferential tax rates to spread to 1.8 litre-engine cars.

"It's indeed a big surprise," said a senior executive with sport utility vehicle (SUV) maker Great Wall Motor Co (2333.HK: Quotazione).   Continua...