cens logo

China to raise consumption tax on bigger cars

Sep 24, 2008 | By Michelle Hsu

The Beijing government confirmed in July that it would raise the consumption tax on transportation vehicles that emit excessive pollution, a new measure in line with its energy-saving policy.

Meanwhile, the government is drafting another tax package to offer favorable consumption tax to cars with higher fuel efficiency.

The current consumption taxation scheme, effective from April 1, 2006, is based on engine displacement: a 3% tax on engines of less than 1000 c.c., 5% for displacements between 1000 c.c. and 2200 c.c.; 9% between 2200 c.c. and 3000 c.c.; 14% between 3000 c.c. and 4000 c.c.; and 20% for displacements over 4000 c.c.

The Beijing authorities may reportedly raise the tax rate on engines bigger than 3000 c.c., possibly doubling or more such taxation.

European Union approves Renault- AvtoVAZ deal

The European Union Committee in March approved the French Renault Group to acquire a major stake in the Russian automaker for US$1.17 billion.

The committee decided on the approval after investigating possibilities of monopoly, discovering that the acquisition wouldn't monopolize the European market.

In February, Renault Group reached an agreement with the Russian AvtoVAZ Company to acquire a 25-% stake in the latter for US$1.17 billion, for which the down payment is US$1 billion, with the whole acquisition to be completed by 2010.

The acquisition would enable Renault to restore AvtoVAZ's position in the Russian market, and expand their market share in Russia, which has replaced Germany as the largest auto market in Europe. Their cross-border partnership will help double AvtoVAZ's annual production from the current 1.5 million units to three million by 2014.

AvtoVAZ, the largest automaker in Russia, has been suffering shrinking market share over the past few years due to severe competition from newcomers. The partnership will see Renault remain to help promote AvtoVAZ's Lada, a make that is familiar with most Russian drivers.

According to the European Bank for Reconstruction and Development (EBRD), the Russian auto market grew 14% in 2007, and has great potential for further growth. Currently, every 1000 Russians own 157 cars.

India mulls limits on China-made auto parts

Indian mass media report that imports of China-made auto parts have been growing rapidly over the past two years, threatening Indian auto parts makers. To reduce such imports, the Indian government is considering applying protectionist measures.
Reports are that Indian automakers significantly increased purchasing China-made auto parts when faced with soaring raw material prices and rising inflationary pressure at home, with some having even set up procurement offices in China for long-term business.

China-made auto parts now account for 10% of India's auto parts imports, compared to merely 1.5% in 2003-2004, with China supplying virtually all the increase in Indian auto parts imports over the past three years. Indian auto parts makers estimate that China-made items are roughly 30% cheaper than locally-made, hence unbeatable price-wise.

Taiwan government offers incentives to encourage production and purchase of electric bikes.Taiwan government offers incentives to encourage production and purchase of electric bikes.

Challenged by Chinese counterparts, most Indian auto parts makers cannot afford to match such low prices fully as well as struggle with the hardship associated with soaring raw material prices. Take auto glass suppliers for example: Their raw material costs rose 50% over the past two years, but they could raise prices by only 10% and absorb most of the increase in material cost.

A survey of 33 Indian auto parts producers shows 19% drop in profits during the first quarter of this year, with profits predicted to shrink even faster in the following quarters.

Indonesia raises prices of fuel

To reduce the government's outlay for fuel subsidies, Indonesia raised the prices of subsidized gasoline by 33% and diesel by 27.9% in July. "The prices would rise on average by 28.7%," said Finance Minister Sri Mulyani Indrawati.

As Asia's top diesel and gasoline importer, Indonesia has been subsidizing drivers to offset the impact on its home car market from skyrocketing international crude oil prices. The subsidies, however, saddle official expenditures amid rising international oil prices; so the government finally decided to raise the fuel prices during the second quarter of this year to reduce its outlay.

"The gasoline price will be raised to 6,000 rupiah (US$0.64) per litre and diesel raised to 5,500 rupiah," Energy Minister Purnomo Yusgiantoro told a parliamentary commission in May. Prior to the adjustment, the gasoline price is 4,500 rupiah a litre and diesel 4,300 rupiah a litre. The government has budgeted 126.8 trillion rupiah (US$13.6 billion) for fuel subsidies this year, or about 13% of total government spending of 989.5 trillion rupiah.

The hike in Indonesian fuel prices are likely to impact the country's leading car distributors: Indomobil Sukses International, agent for Nissans, Suzukis, Hinos, Volvos and Audis, claims to have been slightly affected by such price hikes. Whereas smaller auto dealers would expect harsher impact on business as higher fuel prices would definitely compromise willingness to buy new cars.

Philippines to reduce preferential taxation for vehicle assembly

The Filipino government, to increase tax revenues, plans to reduce the number of industries entitled to preferential taxation, with the vehicle assembly sector reported to suffer under such tax adjustment plan.

In late 2007 the Filipino government started considering cutting preferential tax for industries, with the Board of Investment (BOI) having discussed with the Chamber of Automotive Manufacturers of the Philippines (CAMPI) to reach consensus.

Under the proposed "2008 Investment Priorities Plan" (IPP), the BOI plans to reduce the number of industrial sectors entitled to favorable taxation from 11 to six. One sector to be removed from the preferential taxation list is vehicle assembly, which aroused concern of CAMPI due to the already feeble auto industry in the country.

In addition, Filipino automotive parts makers are asking for more government support such as the incentives given by the governments of their ASEAN counterparts.

Taiwan to boost production of electric bikes

Showing determination to back its energy-saving and CO2-reduction policies, the Taiwan Cabinet in July announced its plan to boost production of electric bikes-aiming for an annual output of 100,000 bikes within four years.

To meet such goal, Taiwan will complete a set of testing standards for electric bikes by the end of September, marking the first of its kind in the world. And to encourage purchasing electric bikes, the government proposes to subsidize each electric bike sold in the country NT$15,000.

Supporting the official policy, SYM Motor, a major motorcycle maker in Taiwan, proposes a three-year plan to produce 6,000 electric bikes in the first year, double that in the second year, and double it again to 24,000 units in the third year.

KYMCO, Taiwan's other top-ranking motorcycle producer, will launch an electric bicycle in October, and debut a light-duty electric bike next March.

TAI signs MOU with Taiwan's ARTC

The Thailand Automotive Institute (TAI) signed a memorandum of understanding (MOU) with the Automotive Research and Testing Center (ARTC) in March for cooperation in technology development, standards-setting, product testing, industrial polices, and other auto-related issues.

"The cross-border project will help Taiwan to explore the Southeast Asian market where the auto market has been growing rapidly over the past few years," said ARTC President L.C. Huang. He estimated that the Association of the Southeast Asian Nations (ASEAN) turned out a total of 2.1 million vehicles in 2007, compared to 2.3 million units in India.

Thailand is the largest among ASEAN markets with annual car sales of 1.3 million in 2007. As the third-largest imported auto parts supplier in Taiwan and the 12th largest export market for Taiwan-made automobiles, Thailand has close industrial links with Taiwan.

Industry Reports

K, the leading global plastic and rubber trade fair (Photo courtesy of Messe Düsseldorf/ctillmann)

K, The World's Leading Trade Fair for Plastic and Rubber Industry

Jul 24, 2020

2019 K Show, the leading global trade fair for the plastics and rubber industry, had been held in Düsseldorf on 16-23 October, 2019. There were 3,330 exhibitors from 63 nations proved impressively: plastics continue to be an innovative, indispensable material. But they also unanimously underscored the necessity of having operational circular economies along the complete material chain and to this...

Photo courtesy of CENS

Digital Healthcare & Technology at the Heart of Las Vegas CES 2020

Jul 14, 2020

■ Hubert Chih The number of healthcare exhibitors at the 2020 CES in Las Vegas increased significantly by 23% from 2019. According to the analysis and report by the CES organizer, digital healthcare and technology were the focus in the healthcare exhibition. In addition to the continued expansion of healthcare coverage, the reduction of healthcare costs, the improvement of effectiveness and th...

The Taiwan Hardware Show sees global buyer attendance. (Photo provided by Kaigo Co.)

Taiwan's Hand Tools Seeking Opportunities Amid Global Crisis

Jul 10, 2020

Due to the COVID-19 pandemic sweeping the globe, most of the international hardware shows slated for this year has been moved to 2021. However, as Taiwan’s efforts combating the new virus has proven to be successful, the 2020 Taiwan Hardware Show (THS) will continue as scheduled, beginning on Oct. 13 and ending on the 15th at the Taichung International Exhibition Center, thus becoming the only sh...

Industry In-Focus

SINOSTEEL Corporation: Rising price in Steel</h2>

SINOSTEEL Corporation: Rising price in Steel

Jun 05, 2020

Brazil’s new crown pneumonia epidemic has rapidly increased. Brazil’s Vale, the world’s largest iron ore producer, is facing an out-of-control impact. The market is worried that iron ore production and sales will be affected. new highs. Experts from Sinosteel (2002) evaluated that steel prices will rise steadily under the effect of rising costs, with a promising outlook. According to a legal p...

Apple Invests Millions in LED Plant in Taiwan</h2>

Apple Invests Millions in LED Plant in Taiwan

Jun 01, 2020

Apple is considering to invest over US$330 million in a factory in northern Taiwan to manufacture both LED and micro-LED displays for its iPhones, iPads, MacBooks, and other new devices. Apple is teaming up on the new factory with Epistar, Taiwan's top LED producer, and Taiwanese LCD panel maker, AU Optronics. The plant will be located in the Longtan branch of the Hsinchu Science Park and Appl...

Taiwan Machinery Was Applauded in COVID-19</h2>

Taiwan Machinery Was Applauded in COVID-19

May 18, 2020

What the epidemic showed was the amazing flexibility of Taiwan's machine tool industry. Taiwan, which has allowed the semiconductor industry to specialize in the past, has finally realized that these machine tool industries with amazing strength are the "invisible champions" of Taiwan's economy. In early February, three companies -- Habor Precision, Tongtai Machine & Tool and Taiwan Takisawa -...

Supplier News

With professional technics and rigorous quality control, Kung Hsing gains high-reputation in the industry</h2>

With professional technics and rigorous quality control, Kung Hsing gains high-reputation in the industry

Jul 23, 2020

Kung Hsing Plastic Machinery Co., LTD., founded in 1972, is the brainchild of the company President Tsai Chin-lien’s over 48 years of experience in designing and producing extrusion machines. The firm stood by its belief to uphold integrity and offer the best quality and services, eventually becoming a leader in the extrusion machinery industry in Taiwan. Kung Hsing currently has two factories; t...


Wood-Imitation Pellets and Profiles (Photo courtesy of INTYPE)

INTYPE Follows World Trends for Operation: Environmentally Friendly Manufacturing, Sustainability and Circular Economy

Jul 21, 2020

■ Tseng Lung-nan Intype Enterprise has built up 55 years of experience in producing extruders, though the firm is placing greater consideration on rapidly degrading of the global environment. In the past 20 years, Intype has become an active contributor to building up a global ecosystem, enabling them to reuse the products manufactured by their own extruders and avoid further waste. The firm t...


YFCM Carbon Fiber Driveshaft Lauded in the field of Modified Cars for its Flexibility </h2>

YFCM Carbon Fiber Driveshaft Lauded in the field of Modified Cars for its Flexibility

Jul 14, 2020

■Hsiao Yung-le Yifeng Technology Co., Ltd. specializes in the research and development of carbon fiber transmission shafts and the manufacture of carbon fiber related products.The carbon fiber material has the characteristics of lightweight, impact resistance, fatigue resistance, and corrosion, and chemical stability is quite high. The product type is increasing in the extensive range with an ...


Insiders' Views

Caption: Pictured from front row, third right, Changhua County Government Economic Affairs Department Director Liu Yu-ping, County Magistrate Wang Huei-mei, Secretary Chen Bo-tsun pose in front of the exhibition booth. (Photo provided by CHCIA)

Changhua County Government Shores up Biz-Matching to Global Buyers

Nov 18, 2019

■Yang Feng-Chun In a bid to assist manufacturers in Changhua County to expand their market reach overseas against severe competition in the globalized market, Changhua County Government has been an active player in pushing for a makeover and innovation of its local small and medium-sized enterprises. This is done in hopes of establishing stronger connection with international markets. An ex...

Paul Master offers high-quality chassis and engines parts for passenger cars, trucks, and industrial trucks. (Photo courtesy of Paul Master)

Paul Master Builds Reputation with Auto Chassis and Engine Parts

Nov 18, 2019

Founded in 1980, Paul Master Auto Parts Co. is headquartered in Taiwan, a professional manufacturer of chassis and engines parts for passenger cars, trucks, and industrial trucks including forklifts. General Manager Terry Liang said the company has its own professional design department, which provides customized products and specifications for global buyers, including automobile steering and...


Nan Hoang Traffic Instrument Co., Ltd.</h2><p class='subtitle'>Taiwan First brakes Technology Co., Ltd. </p>

Nan Hoang Traffic Instrument Co., Ltd.

Taiwan First brakes Technology Co., Ltd.

Sep 04, 2019

Nan Hoang Traffic Instrument Co., Ltd is one of the major manufacturers of automobile friction materials in Taiwan and globally. Chairman Austin Cheng has implemented the double-arrow strategy this year - own brand of “YangPo” is adopted to focus on global channels while the “NHC brand focuses on improving market shares in global markets, such as Europe, America, Asia, Australia, and the Middle E...

Exhibition Highlights

Koelnmesse (Beijing) Co., Ltd.

Announcement on Postponement of China International Hardware Show 2020 (CIHS 2020)

Jul 10, 2020

In view of the continuous spreading of COVID-19 all over the world and the latest epidemic prevention requirements of China and the government of Shanghai, in order to guarantee the health and safety of exhibitors, purchasers and professional visitors, China National Hardware Association and Koelnmesse have prudently decided to postpone China International Hardware Show 2020 (CIHS 2020) from Augu...

Automechanika Shanghai 2020 creates channels for cross-sector collaboration</h2>

Automechanika Shanghai 2020 creates channels for cross-sector collaboration

Jun 16, 2020

This year, Automechanika Shanghai continues to serve the entire automotive value chain by offering opportunities for information exchange, marketing, trade and education. Both vertically and horizontally, from OE, vehicle production to the aftermarket, it incorporates all elements of manufacturing, supply networks, services, new business models and information technology. Companies across the...

Messe Frankfurt (Shanghai) Co Ltd

CAPAS defers to 2021

Apr 20, 2020

Following the Chinese Government’s initiatives to prevent and control the COVID-19 outbreak, the organisers of the Chengdu International Trade Fair for Automotive Parts and Aftermarket Services (CAPAS) have announced the defer of the show’s 2020 edition. The fair, originally scheduled from 21 to 23 May 2020, will now be held from 20 to 22 May 2021. In China, the State Council issued an announc...