China is slapping a 10 per cent tax on cars like the Ferrari GTC4Lusso, Bentley Bentayga and Aston Martin DB9 in a bid to combat conspicuous consumption and promote more efficient vehicles.
Buyers of autos costing more than 1.3 million yuan (US$189,000) will be hit with the tax starting Thursday, the Ministry of Finance said in a statement on its website on Wednesday. The levy on “super luxury” vehicles is meant to lower emissions and save energy, the ministry said.
The tax is China’s latest move to tone down spending by the country’s growing ranks of wealthy consumers. While the additional cost will be a limited deterrent for people willing and able to spend vast sums on a car, it’s another drag on these vehicles, which were just showing signs of recovery from President Xi Jinping’s two-year-old corruption crackdown.
Manufacturers of ultra-luxury vehicles have been shifting their lineups in recent years to appeal more to Chinese buyers, who generally prefer large autos over sports cars.
Rolls-Royce and Aston Martin are both planning their first SUVs, following Bentley’s lead with the Bentayga, which starts at 3.98 million yuan in China.