Effect of tax cut tapers off in car salesMadeinkoreablog
Growth in Korea’s auto market tapered off this year despite a consumption tax cut program on passenger cars, industry data showed Wednesday.
Korean and foreign carmakers sold a combined 637,369 units in the first five months of this year, up 8.3 percent from 588,541 units from the same period last year, according to the data compiled by the Korea Automobile Manufacturers Association and the Korea Automobile Importers and Distributors Association.
In comparison, a total 594,457 passengers cars were sold from September to December, up 19.1 percent from a year earlier.
The upturn last year is attributed in part to the government’s tax cut on cars.
In August, the government slashed excise taxes on cars and large household appliances by 30 percent to 3.5 percent till Dec. 31.
The tax cut program, the first since 2012, was meant to fuel private consumption in the second half of last year.
In February, the government extended the consumption tax cut program on passenger cars to June to try to bolster domestic demand of Asia’s fourth-largest economy.