Core Viewpoint - The new luxury car consumption tax policy, effective from July 20, 2025, introduces a 10% consumption tax on vehicles priced over 900,000 yuan (excluding VAT), marking a significant change since the establishment of the luxury car tax system in 2016 [2][7]. Group 1: Policy Changes - The scope of luxury car taxation has been adjusted to include all types of vehicles with a retail price of 900,000 yuan and above, including electric and fuel cell vehicles [5][7]. - The sale of second-hand luxury cars will not be subject to this consumption tax, defined as vehicles sold after registration but before reaching the mandatory scrapping standard [3][5]. - The new policy aims to guide reasonable consumption and promote energy conservation and emission reduction [7][19]. Group 2: Market Impact - The new tax regulation is expected to impact high-end brands like Porsche and Mercedes-Benz, which have significant sales in the affected price range [12][13]. - In the first half of 2025, approximately 37,000 new cars priced above 900,000 yuan were sold, with fuel vehicles still dominating the market despite a 41% year-on-year decline [13][14]. - The luxury car market has seen a decline in demand for imported vehicles, with a significant drop in import volumes since 2014, indicating a shift in consumer preferences towards domestic brands [13][14]. Group 3: Price Adjustments - Many luxury brands have experienced substantial price reductions, with some models seeing price cuts of over 50%, reflecting the competitive market environment [15][16]. - For instance, the Maserati Grecale SUV has seen its price drop from 650,000 yuan to as low as 368,000 yuan, indicating aggressive pricing strategies among luxury car manufacturers [16][17]. Group 4: Expert Opinions - Experts suggest that the impact of the new tax policy on luxury car sales will be manageable, as the affected sales volume represents a small fraction of the overall luxury car market [19][21]. - The adjustment is viewed as a structural tax reform that maintains overall tax stability while selectively increasing tax burdens in certain areas, which could enhance government revenue without significantly affecting consumer behavior [21][22].

Core Viewpoint - The adjustment of the consumption tax policy for ultra-luxury vehicles in China is a significant change aimed at promoting reasonable consumption and environmental sustainability, with a limited impact on overall luxury car sales [1][2][5]. Group 1: Policy Changes - The new consumption tax policy for ultra-luxury vehicles, effective from July 20, 2025, lowers the taxable threshold to vehicles priced at 900,000 yuan (excluding VAT) and above [1][2]. - The policy exempts the sale of second-hand ultra-luxury vehicles from consumption tax, marking a major shift since the establishment of the tax system in 2016 [2][5]. - The previous threshold for taxation was set at 1.3 million yuan (including tax), which has now been adjusted to reflect market changes [4][5]. Group 2: Market Impact - In the first half of 2025, approximately 20,000 new vehicles fell within the taxable range, representing a small fraction of the total luxury car sales of 1.45 million units during the same period [1][5]. - The luxury car market is experiencing a decline, with sales of new vehicles priced above 900,000 yuan dropping significantly, particularly in fuel and plug-in hybrid models [3][4]. - The market share of imported luxury vehicles has been decreasing, with a notable drop in imports from a peak of 1.43 million units in 2014 to an estimated 700,000 units in 2024 [3][4]. Group 3: Consumer Behavior - The adjustment in tax policy is expected to have a limited effect on the purchasing behavior of ultra-luxury vehicle consumers, who are characterized by strong purchasing power [6]. - There has been an increase in promotional activities among luxury car brands, with discounts reaching up to 30% on certain models, indicating a competitive market environment [4][5]. - The urgency to complete transactions before the new tax implementation has led to a noticeable increase in sales activity in the days leading up to the policy change [5]. Group 4: Tax Revenue and Regulation - The consumption tax is a significant revenue source for the government, with a reported collection of 772.9 billion yuan in the first five months of the year, reflecting a 1.6% year-on-year growth [5]. - The new policy aims to enhance tax regulation by closing loopholes that allowed for tax evasion through price manipulation and multiple invoicing [6].