Gas-guzzling imported luxury cars with heavy emissions are to face a possible car consumption tax rise in China, industry insiders predict.

The State Council, China's Cabinet, held an executive meeting on Wednesday noting the significance of energy savings and made a special call on the country's auto industry to cut back on gas consumption.

But no exact standard or details of when the tax would be raised or when it would happen were released.

State Administration of Taxation (SAT) sources said the agency had held multiple discussions on the consumption tax rise. A draft plan had come out, but the final decision was yet to come.

Reflecting the anticipation of such a tax rise, some consumers in China may push forward their purchasing plans. This has led to a rise in import luxury car sales.

China Automobile Trading Co., LTD (CATC) figures show from January to May, 26,992 large cars were imported. This comprised a 41.38 percent share of total car imports. Sport utility vehicles (SUV) imports in the first five month surged 91.3 percent over same period last year.

One Chrysler dealer in Guangzhou, capital of the south Guangdong Province, said the possible tax rise was prompting potential buyers to push forward their planned purchases. As such, the dealership was stopping its discounts activities designed to attract clients.

The tax rise, if realized, would have the biggest impact on auto producers from the European Union (EU) and Japan as luxury cars mainly came from those two regions, according to customs figures of some major car consuming areas in China.

(Xinhua News Agency July 26, 2008)