The Golden Week Holiday in October has always been a peak season for car sales in China. But recent higher taxes for cars with larger engines has put a damper on sales figures. But dealers are hoping to break the downtrend, launching aggressive promotions for home-made cars during the National Day Holiday.

Many have slashed prices by as much as 30,000 yuan per car, with discounts applying to 30 different models.

Su Hui, the general manager of Yayuncun auto market, said, "Many domestic auto producers did not reach their sales targets in the second and third quarters. So it will take them lots of effort to catch up in the 4th quarter. That's why they are launching massive sales promotions now."

But prices for imported sedans remain unchanged, despite sales for imported cars dipping dramatically so far this month.

Su Hui said, "Many importers of luxury have not decided whether or not they want to reveal their final pricing decisions at this point, with the new tax measure on bigger engine taking effect only this month. So everyone in the market is taking a wait-and-see attitude at the moment."

Hashimoto Toshiaki, the general manager of Suzuki China Investment, said, "Some people just love big engine cars. So their purchasing decisions will not be affected by new tax rates on big cars."

Figures show weekly sales for high-emission luxury foreign sedans in Beijing dropping nearly half in September, compared to levels in August. While the situation is not much better in other major cities, such as Shanghai and Guangzhou.

Car dealers say that only a few importers have announced new prices for big vehicles, so many buyers still have to wait until all prices are made public.

But sales people are also pointing out that overseas manufacturers have not announced any plans to stop importing high emission vehicles. But they believe big sedans with engine capacities of 2.4 to 3.5 liters will more popular in future, and will replace vehicles with capacities of above 4 liters.

(CCTV September 16, 2008)