Ford prepares contingency strategy for changes in purchase tax policy

Since last year, China has implemented a preferential policy of halving the vehicle purchase tax for passenger cars with a displacement of 1.6 liters or less. Now, with less than a month until the expiration of the policy, whether the policy will be continued has become a focus of attention from many parties. According to Reuters, Ford Motor executives said they are preparing contingency strategies for various outcomes.

Auto industry associations, automakers and analysts are all worried that if the purchase tax incentives are cancelled, the sales growth trend will be interrupted. Peter Fleet, Ford's Asia Pacific sales and marketing director, said in an interview with Reuters: "I would not be surprised if the incentives are extended, even if it is announced on the last day of 2016."

In the face of policy uncertainty, Ford listed three scenarios: cancellation, narrowing of the preferential policy, and extension of the original preferential policy. Fleet said: "We are now assuming that the tax reduction preferential policy will expire at the end of the year. If the policy changes, we will make adjustments quickly."

Fleet believes that car demand will remain strong next year and changes in tax reduction policies will only have a small impact on sales.

This year, my country's auto market has grown beyond normal, with sales in the first 10 months up 13.8% year-on-year. The policy of halving the purchase tax on small-displacement passenger cars in 2009 led to a significant increase in domestic auto sales that year. After the policy was cancelled in 2011, the sales growth rate slowed down significantly. The industry is generally worried that once the policy is cancelled, sales growth in 2017 will stagnate or even decline.

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.