61,500 Automobiles Imported Parallelly in Tianjin Port Free Trade Zone in 2017, with a Year-on-year Growth of 68%

ĦĦĦĦRecently, Customs Tariff Commission of the State Council issued an announcement on reducing import duties for automobiles and automobile parts. Immediately after this favorable news was released, the automobile terminal sale market had some responses. A few days ago, many Chinese standard imported automobile brands such as Tesla, Benz, BMW, Volvo, Lexus and Jeep successively expressed that they would reevaluate the prices of their products, and some manufacturers even expressed that they would directly lower the prices of their automobiles currently on sale based on the reduction in the customs duties.

ĦĦĦĦThe field of parallelly imported automobile is more sensitive to this customs duty reduction. In Calistar Binhai International Automobile City located in Tianjin Port Free Trade Zone, prices of many imported high-grade cars were reduced. Ħ°At present, all cars on sale are sold at the latest prices recalculated based on the lowered exchange rate,Ħħ Liu Zhi, director of Product Department of Calistar, told the reporter, Ħ°after the announcement on reducing customs duties was released, we adjusted the prices of the cars on sale immediately. Consumers intending to buy car do not have to wait for a month, and the current price is the favorable price lowered based on the duty reduction to be implemented on July 1.Ħħ Liu Zhi made some calculations for the consumers: taking for example a 4.0L imported car with the customs declaration price of RMB 500,000, the comprehensive tax rate is 143.75%; if calculated based on the customs duty rate of 25%, the consumption tax rate of 40% and the VAT rate of 17%, the customs duty for this car is RMB 125,000, the consumption tax is RMB 200,000 and the VAT is RMB 85,000, so the total tax and duty is RMB 410,000; after July 1, the comprehensive tax rate will be reduced to 122.33%, the customs duty rate will be reduced to 15%, the VAT rate will be reduced to 16%, and the consumption tax rate will remain unchanged, so the customs duty for the car will be RMB 75,000, the consumption tax will remain RMB 200,000, the VAT will be RMB 80,000, and the total tax and duty is RMB 355,000; it can be seen that about RMB 55,000 will be saved in total after the reduction of customs duty.

ĦĦĦĦHowever, Liu Zhi added that, Ħ°for imported cars, taxes and duties mainly include customs duty, consumption tax and VAT. The reduction in customs duty rate from 25% to 15% indicates a reduction of 10%, but does not mean a reduction of 10% in the terminal selling price of a car. The actual reduction in the selling price also depends on engine displacement, final customs declaration price, comprehensive tax rate and other factors. Generally speaking, this reduction in customs duty will lead to a reduction of 12% to 22% in total tax and duty of imported car. Currently popular cars such as Benz GLS and Nissan Patrol will have different reduction in selling price.Ħħ

ĦĦĦĦAs introduced by Wang Guoliang, director of the management committee of Tianjin Port Free Trade Zone and deputy director of the management committee of Tianjin Pilot Free Trade Zone, in 2017 totally 120,000 automobiles were imported parallelly in Tianjin, taking nearly 80% of the corresponding number of the whole country; the quantity of parallelly imported automobiles in Tianjin Port Free Trade Zone was 61,500, with a year-on-year growth of 68%, taking 39% of the quantity of the whole country and taking 51% of the quantity of Tianjin. The further expansion in the scale of parallel automobile importing in Tianjin Pilot Free Trade Zone has broken the market layout dominated by Chinese standard automobiles, has effectively promoted reasonable price reduction, and has provided benefits for consumers.

ĦĦĦĦIn the next step, Tianjin Pilot Free Trade Zone will, under the favorable situation of the lower customs duty for imported automobiles and automobile parts in China, further support import expansion, improve after service system, carry out compliance correction on a standardized basis, and innovatively conduct automobile insurance and finance business, so that common people can enjoy more benefits from the reform.

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