SHANGHAI/BEIJING : China will impose an extra 10 percent tax on super cars and other luxury models costing 1.3 million yuan ($188,852) and above, in a bid to rein in lavish spending and to reduce emissions, the ministry of finance has said. The new tax rate will potentially affect pricing for top of the range models from carmakers like BMW, Daimler AG’s Mercedes-Benz and Audi AG, as well as super high-end brands like Ferrari, Aston Martin and Rolls-Royce. Carmakers played down the impact, saying the tax hike would only impact a small number of models, while executives said wealthy Chinese buyers were unlikely to be put off by a relatively marginal price hike on already expensive cars. China, spearheaded by President Xi Jinping, has been cracking down on ostentatious shows of wealth over the past few years, a drive that has hit domestic luxury sales from premium alcoholic spirits to handbags. Beijing issued new rules saying top officials should cut down expensive travel and avoid owning fancy cars, the official Xinhua news agency said on Thursday.

The tax hike, effective from Thursday, also comes as prices of luxury cars have been falling steadily in China, in part due to consumer criticism that global car brands have been overcharging Chinese buyers.