CNBC AI News, July 19th—This week, China’s Ministry of Finance unveiled revised regulations concerning the consumption tax levied on ultra-luxury vehicles.
The updated guidelines redefine the scope of the tax to include passenger cars and light/medium-sized commercial passenger vehicles, regardless of powertrain type (including electric and fuel cell vehicles), with a retail price of 900,000 yuan (approximately $125,000 USD), excluding VAT, or higher.
Set to take effect on July 20th, 2025, the impending tax hike has reportedly spurred a buying frenzy for high-end automobiles, particularly brands like Porsche.
According to local Chinese media reports, Porsche dealerships across the country have experienced a surge in customer traffic in anticipation of the new regulations. Sales consultants are struggling to keep up with demand.
“Inventory is extremely tight at the moment,” one sales representative reportedly stated. “Since last night, we’ve sold roughly six or seven vehicles. Even the showroom models are being purchased. The 911 and Panamera are the most popular. We only have one 911 in stock, and there are limited allocations for the standard wheelbase Panamera. The executive versions are even harder to come by. We expect even more customers on Saturday.”
The new regulations mean that consumers purchasing these luxury vehicles after the deadline will face an additional cost of potentially hundreds of thousands of yuan.
Luxury car dealerships are highlighting the financial implications for prospective buyers: “If the invoice is issued before Saturday, a car priced at just over one million yuan could save you over ten thousand yuan. After Saturday, the same car will cost you much more. Now is the most advantageous time to buy a new car, and many consumers who were previously hesitant are now aiming to finalize their purchase before the new rules are implemented.”
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