(Yicai Global) Dec. 5 -- Demand for imported cars in China may fall by as much as 5 percent next year as tax policy changes and other factors weight in on the world's largest auto market.

Both supply and demand in the import market fell this year, state-backed Beijing News reported, citing a report from major domestic distributor Sinomach Automobile, which works with the likes of Volkswagen, General Motors and Ford. Industrial inventory also fluctuated sharply due to the changing tariff rates, it added.

China imported 847,000 cars in the first three quarters, an annual decline of 4.2 percent while the number of new-energy vehicles brought into the country fell 1 percent to 16,000 units.

The Tianjin-based sales firm believes that the international auto environment will deteriorate again next year, with China increasing the tax rate on cars brought in from the United States and preparations for stricter emissions standards rolling out nationwide in 2020 pushing domestic demand down.

Hainan province and Shenzhen city became the first regions to implement the China 6a standards for vehicle emissions, and prominent areas like Beijing, Shanghai and Tianjin are set to adopt them early next year. The rest of the country is set to have them in place by mid-2020 and then three years later, the whole nation will bring in the China 6b regulations -- which are stricter than their European counterpart Euro 6.

Editor: James Boynton