Capital Motors Inc (CMI, 中華賓士), the authorized dealer for Mercedes-Benz Taiwan Ltd (台灣賓士), said yesterday its car sales grew 75.8 percent as of last month from a year ago, indicating a recovering economy.
Capital Motors said it intended to sell more than 7,000 cars this year, up from 5,000 last year, after Taiwan rebounded from the global financial downturn, while downplaying the impact of a possible luxury tax to be imposed by the government on the auto industry.
“Economic recovery is evident as consumers have become more confident,” Capital Motors president A.A. Khoo (柯亞洪) told the Taipei Times yesterday on the sidelines of a ceremony to celebrate the company’s 40th anniversary.
“We see this year to be a record year in terms of retail sales and we are very confident this trend and momentum will continue next year,” company chief operating officer John Good said.
Although the global economy has shown signs of slowdown, “the [economic] foundations are still quite strong and that reflected back to the passenger car market in Taiwan,” Good said. “I’m still quite optimistic that next year will be another good year for CMI.”
Khoo said that the government’s plan to impose a “luxury tax” would only have a temporary impact on the luxury car market as demand for high quality vehicles among young entrepreneurs remains strong.
The “luxury tax” refers to an additional tax imposed on luxury goods, including imported luxury automobiles or vehicles with larger engines, a supplementary measure to the reduction of inheritance and gift tax rates from as high as 50 percent to 10 percent, according to the Ministry of Finance.
However, Mercedes-Benz Taiwan general manager of network development Jess Liu (劉秀盈) said that the proposed luxury tax might curb auto consumption, which is not necessarily a good thing for the government.
“This means that gains from custom tariffs for imported vehicles would likely drop, bringing down the government’s overall tax revenues,” Liu said.
He said the government should instead levy heavier taxes on capital gains on wealth if was serious about narrowing the growing income gap.
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