Nov. 30 – Vehicle sales tax breaks and rebates for fuel-efficient vehicles are set to be extended to next year ensuring the continued strength of the Chinese automobile market.

The preferential tax policy was intended to be applicable only until the end of this year when vehicle purchase taxes were slashed by half for vehicles with 1.6 liter engines or smaller. According Global Times, the measures will either be adjusted to continue the current policy or rebates may be given based on fuel consumption.

Car sales in China have already overtaken the U.S. market making it the largest in the world. The jump in sales has been mostly due to the effects of the Beijing’s stimulus plan as it offered generous subsidies and tax cuts to buyers from rural areas.

The China Association of Automobile Manufacturers (CAAM) reported that 5.06 million low-emission vehicles of 1.6 liters and below were sold from January to September, an increase of 60.43 percent year on year. The low-emission vehicle sales accounted for 69.89 percent of the passenger vehicle market during the first nine months of the year.