Automakers, optimistic that Beijing's tax break for small vehicles will boost demand, are ramping up production in China.

 

Industry production of light vehicles with engine sizes of 1.6 liters and smaller rose more than 12 percent year on year to 1.3 million units in October, said Miao Wei, Minister of Industry and Information Technology.

 

On Oct. 1, Beijing halved the purchase tax for vehicles with engines 1.6 liters and smaller to 5 percent to boost vehicle sales. The tax cut will remain in effect until the end of 2016.

 

During a Thursday press conference in Beijing, Miao attributed higher production to the tax incentive. "The policy's effect [in boosting small-vehicle sales] is rather obvious," he said.

 

Because of the tax incentive, output of vehicles with engine displacements of 1.6 liters and smaller constituted 69.5 percent of China's total vehicle production last month, up 1.8 percentage points from September, according to Miao.

 

Several automakers have reported higher vehicle sales in October, but total light-vehicle deliveries across the industry have not been tallied and released.

 

In the first nine months, light-vehicle deliveries in China rose only 2.8 percent from a year earlier to 14.5 million vehicles, as the nation's economic slowdown cooled demand.

 

Sales of commercial vehicles have been especially slow, although demand for passenger vehicles in China's interior cities continues to grow.

 

In 2014, light-vehicle deliveries in China rose 9.9 percent year on year to 19.7 million vehicles.