CHENGDU, Dec. 16 (NBD) -- China announced it would extend a tax cut on small-engine vehicles to 2017, in an effort to continue to vitalize the world's largest auto market.

The country's Ministry of Finance said on its official website on Thursday that it would rise the purchase tax rate for vehicles with 1.6-liter engines or below to 7.5 percent, and plan to further levy the normal 10 percent starting on Jan 1, 2018.

The tax rate is currently 5%, having been halved in October last year.

Figures from the China Association of Automobile Manufacturers (CAAM) showed that China's overall automobile sales in first 11 months reached to 24.95 million, increasing 14.11 percent when compared with the same period last year.

Analysts attribute much of that relatively strong growth to the purchase tax cut on small-engine cars.

Xu Haidong, assistant of secretary-general of CAAM told NBD that considering the purchase tax rate, automobile sales next year might stand between 4% to 5%.

However,Shi Jianhua, deputy secretary-general of CAAM noted that the positive effect of the tax break on the market would have diminished even if the tax break has been extended, because many customers purchased cars this year to take advantage of the lower tax.