Beijing is at loggerheads with the rest of the world on issues from the Chinese currency to the Nobel peace prize, but on one point all the world agrees: Chinese consumers should spend more.
When it comes to buying cars, China seems to be heeding that message. For the past 18 months – spurred in part by government stimulus measures including tax breaks – mainland sales have consistently outperformed expectations, making China the world’s largest carmaker in 2009, several years earlier than expected. But now that tax cuts are on the way out, is China’s motor industry heading for a hard landing?
The answer could have implications beyond the auto industry: Beijing has vowed to change the structure of the Chinese economy to boost the share of domestic consumption, and car sales are a barometer for that plan’s progress.