China announced Tuesday it will slash tariffs on imported cars, a move that could benefit the global auto industry.

China’s Finance Ministry said auto tariffs will be reduced from 25% to “around 13.8%,” and levies on car parts will come down from 10% to 6%.

“Volkswagen AG, the world’s second largest carmaker, rose 0.7% in Frankfurt trading following the statement as rivals BMW AG  (+1.6%) and Daimler AG (+1.18%) outpaced the DAX performance index, which was marked 0.12% lower by mid-morning. The Stoxx 600 Automobiles and Parts Index, the sector benchmark, gained 0.53% in the opening 90 minutes of European trading,” reports The Street.

China says the change will take effect July 1st.

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