New Chinese Government Auto policy helped to increase sales of small, Sedan and Electric vehicle are main driver for Chinese Passenger vehicle sales in Q1 2016.
Chinese Economy indicators forecast are not supportive to Chinese Auto Industry. Government took some steps to support domestic Auto Industry by reducing taxes on Small car engine (1.6litre) and promote electric vehicle. It is better sales than expeted in 2015. CAAM was expecting lower sales of sedan segment but its sales increase due to new model launches and reduction in tax duty. Electric car also registered more than 100% growth in 2016.
Recently in budget Indian Govt increased tax on cars which would have reverse impact on sales in coming up years. Chinese market can be considered as a case study to check impact of changes of tax structure.