Retail in Asia

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China hikes tax on “super cars”

China will impose an extra 10 per cent tax on super cars and other luxury models costing 1.3 million yuan ($188,852) and above, in a bid to rein in lavish spending and to reduce emissions, the ministry of finance has said. The new tax rate will potentially affect pricing for top of the range models from carmakers like BMW, Daimler AG’s Mercedes-Benz and Audi AG, as well as super high-end brands like Ferrari, Aston Martin and Rolls-Royce. Carmakers played down the impact, saying the tax hike would only impact a small number of models, while executives said wealthy Chinese buyers were unlikely to be put off by a relatively marginal price hike on already expensive cars. SEE ALSO: Audi to collaborate with Alibaba, Baidu and Tencent to sell smart cars in China  The tax hike, effective from 8 December, also comes as prices of luxury cars have been falling steadily in China, in part due to consumer criticism that global car brands have been overcharging Chinese buyers. Analysts and carmakers, however, said the higher tax rate would likely have only a limited impact on mainstream luxury brands such as Mercedes-Benz, Audi and BMW that dominate China’s premium car market segment. Audi said in a statement that cars above 1.3 million yuan made up less than one per cent of its deliveries in China.