China's top economic planner denied proposing to reduce car purchase tax by half on Thursday while noting that there remains huge room for development for the auto industry.
"We have not studied or made the proposal of reducing the auto purchase tax to 5 percent," said Meng Wei, spokesperson for the National Development and Reform Commission, at a press conference.
While softening car sales brought auto firms under pressure, it can also force companies to increase competitiveness, eliminate backward production capacity and drive industrial upgrading, according to Meng.
China's auto sales dropped for the fourth month in a row in October, down 11.7 percent year on year, data showed.
Meng attributed the decline to a higher base in the same period last year, previous tax preferences and the changing international and domestic economic situation.
China's auto output and sales neared 30 million units annually, topping the world and making it hard to sustain rapid growth for such a big market, according to Meng.
However, she pointed to positive sides such as relatively fast growth in auto exports and surging new energy vehicle sales, while highlighting a still-below-average level of auto possession per 1,000 people.
"The potential demand for car consumption and replacement remains relatively big," Meng said. "There is still broad room for development in our auto industry."
