"The price for this car is going to surge by 200,000 yuan (25,000 U.S. dollars)," a car dealer said on Monday in front of a sports utility vehicle in Guangzhou, capital of South China's Guangdong Province.
However, he admitted that "it is really a waste to drive the 4.0L car in cities."
The price hike is the result of a consumption tax which comes into effect on April 1, which will force up the prices of yachts, luxury vehicles and watches.
Observers say the tax is a signal of a change in social values.
"The consumption tax shows that the central government is taking measures to contain the luxury lifestyle," said Zhu Guoren, professor with State Administrative College.
Chinese President Hu Jintao recently called on nationals to uphold the "socialist concept of honor and disgrace," which stressed the value of hard work and plain living.
"Hard working and plain living have been advocated by former Party leaders, and it is a precious tradition in China," said Wu Canxin, a Party history expert of the party school in Guangdong Province.
China succeeded last year in cracking down on extravagance and waste in the sales of moon cake, a traditional dim sum marking the Mid Autumn Festival, after authorities banned it and the media blasted such activities.
In the past decade, moon cake was placed in extremely expensive boxes made of wood, silk or even gold to become presentable gifts.
China witnessed another victory in fighting extravagance early this year, when luxurious banquets for Lunar New Year - one in the eastern city of Hangzhou cost 198,000 yuan (24,444 U.S. dollars) - came under fire from the public. Many restaurants were forced to stop such business ahead of schedule.
Chinese lawmakers and political advisors also called for measures to stop lavishing government funds on building luxury offices, unnecessary and extravagant conferences, and sightseeing at their annual national sessions in March.
However, observers raised concerns that it might be difficult to fight against extravagance among the younger generation who have been spoiled by parents in the past two decades of robust economic development.
In Guangzhou some young people idle all day long and compare each other's luxury items, from sneakers to sports cars. Some young people in other cities lavish every penny of their income and even fall into debt.
"It is not good for them when they always get luxury watches, sneakers and video game players easily," said Wu Canxin.
Educational institutions have already become aware of the phenomenon, as some schools have started courses to teach students on how to manage pocket money.
A website with the name of "upholding socialist concept of honor and disgrace" was launched on Friday, so that young people can learn via the Internet how to tell right from wrong, good from evil, beauty from ugliness, and to apply it to their daily life.
The concept, which underscores the value of patriotism, hard work and plain living, belief in science, consciousness of serving the people, solidarity, honesty and credibility, and observation of the law, aims to refresh China's values by amalgamating traditional Chinese values with modern virtues.