A new round of "trade-in" policy for automobiles has been released, and who will benefit more

The "trade-in" policy for cars has once again been clarified.

On April 12, according to the website of the Ministry of Commerce, the Ministry of Commerce and 14 other departments jointly issued the "Action Plan for Promoting the Trade-in of Consumer Goods" (hereinafter referred to as the "Action Plan"). The Action Plan clarifies that one of the key tasks of trade-in of consumer goods is to carry out trade-in of automobiles.

The "Action Plan" requires that fiscal and financial policy support be increased, and the central government and local governments will work together to arrange funds to support the scrapping and renewal of automobiles, and encourage qualified localities to support the replacement and renewal of automobiles. Highlight the standard traction in the automotive field, improve the recycling and dismantling system of scrapped vehicles, promote the safe and convenient transaction of second-hand cars, cultivate and expand the main body of second-hand car business, and promote the innovation and development of automobile circulation and consumption.

The Action Plan also proposes to accelerate the phase-out of passenger cars with emission standards of China III and below by 2025 by increasing policy guidance and support, increasing the recycling of scrapped vehicles by 50% compared with 2023, and doubling the recycling of scrapped vehicles by 2027 compared with 2023.

The Ministry of Commerce also said that in the next step, the Ministry of Commerce will work with various departments and localities to implement documents and policies, strengthen organizational leadership, strengthen fund management and factor guarantees, coordinate the promotion of activities, increase policy publicity and interpretation, do a good job in supervising the implementation, and promote the trade-in of consumer goods.

Zhao Chenxin, deputy director of the National Development and Reform Commission, said a few days ago that the demand for car replacement is at the level of more than one trillion yuan, coupled with recycling, this market space is very huge, and the contribution to economic growth is self-evident.

Wang Peng, an associate researcher at the Beijing Academy of Social Sciences, said in an interview with the surging news reporter that the impact of the car trade-in policy will be multifaceted, which can not only benefit car buyers, but also drive the healthy development of the entire automobile industry chain.

The Bank of China Research Institute pointed out in a recent research report that a new round of "trade-in" policy for consumer goods will give rise to new consumption growth points. According to quantitative calculations, under different circumstances, the current round of "trade-in" policy is expected to stimulate the demand for new automobiles and household appliances is estimated to be about 210.9 billion to 629.3 billion yuan, which will drive GDP growth by about 0.16-0.5 percentage points. If the current round of "trade-in" policy for consumer goods is combined with preferential policies such as new energy vehicles and new home appliances going to the countryside, it is expected to release greater consumption potential.

Nearly 15 years after the last round of "trade-in", this round of policies is more in line with the consumption structure of increased purchases

The person in charge of the Department of Consumption Promotion of the Ministry of Commerce said that it has been nearly 15 years since the last round of promoting the trade-in of consumer goods nationwide, and the demand for renewal has entered a concentrated release period.

According to the Implementation Plan for Promoting the Expansion of Domestic Demand and Encouraging the "Trade-in" of Automobiles and Household Appliances (2009), the subsidized products for trade-in mainly include automobiles and five types of household appliances. In terms of promoting automobile consumption, the first is to give a subsidy of 3,000 yuan to 6,000 yuan to those who meet the requirements of a certain service life for medium, light, and micro trucks and some medium-sized passenger cars, which are scrapped and replaced with new cars for a certain period of time in advance;

The last round of "trade-in" policy has a very obvious effect. According to CITIC Securities, in the last round of "trade-in" from 2009 to 2011, in terms of automobiles, the government issued subsidies of 6.41 billion yuan in 2010, driving the consumption of new cars by 49.6 billion yuan. In 2009 and 2010, the growth rate of China's automobile production was higher than 30% for two consecutive years.

The "Action Plan" document has not yet mentioned the specific amount of support funds, but the effect of this round of policies is highly anticipated by the market due to the current lack of demand and increasingly fierce competition in the automotive industry.

Wang Peng said that at a time when domestic demand still needs to be stimulated, the introduction of the car trade-in policy is of great significance. First of all, the policy will help stimulate consumer demand for car purchases, promote the growth of car sales, and then drive the development of related industries and increase employment opportunities, which has a positive effect on stabilizing economic growth and promoting social employment.

Second, by encouraging consumers to buy new energy vehicles and scrap high-emission passenger vehicles, the policy will help promote the green transformation and upgrading of the automotive industry. This will help improve the overall competitiveness and sustainable development of the automotive industry in Continental.

Finally, the policy also helps to promote the recycling of resources and reduce environmental pollution. Through the recycling and treatment of used vehicles, the effective use of resources and the reduction of waste can be realized, thereby promoting the development of circular economy and environmental protection.

Wang Peng stressed that it can be said that the policy has important environmental and social significance while stimulating domestic demand.

This round of "trade-in" also presents different characteristics.

Some experts said that in the field of consumption, the last round of "trade-in" activities belonged to the stage of popularization of large durable goods, and this round has been upgraded from solving "whether it is good" to "whether it is good or not".

In other words, the policy of 2008-2009 is more to use the old to solve the problem of market gap, this time it is a problem of further upgrading when the products have been fully popularized.

Everbright Securities believes that in 2022, the sales ratio of first-time purchase and replacement will be 45% and 41% respectively, compared with 70% and 23% in 2016.

New energy vehicles are once again being supported

New energy vehicles that have benefited significantly from this round of policies.

At the regular policy briefing of the State Council held on April 11, Xu Xingfeng, director of the Department of Market Operation and Consumption Promotion of the Ministry of Commerce, said that the "Action Plan" has clarified the large categories, that is, consumer goods such as automobiles, home appliances, home decoration, kitchen and bathroom. The automobile category mainly supports the purchase of energy-saving vehicles and new energy vehicles.

Wang Peng said that from an industrial point of view, this policy will directly promote the growth of automobile sales, and then drive the development of the entire automobile industry chain, including auto parts manufacturing, automobile sales, automobile maintenance, etc. At the same time, with the further expansion of the new energy vehicle market, related industrial chains such as battery manufacturing and charging facility construction will also develop rapidly.

He stressed that the new energy vehicle industry chain will be positively affected by the policy. With the increasing attention of consumers to new energy vehicles and the promotion of policies, the manufacturing and sales of new energy vehicles and supporting facilities will usher in new growth points.

According to data from the Ministry of Public Security, the number of new energy vehicles in mainland China will be 20.4 million in 2023, accounting for 6.07% of the total number of vehicles, an increase of about 2 percentage points from the previous year.

According to the Bank of China Research Institute, assuming that the proportion of new energy vehicles increases from 2 percentage points per year to 3, 2.5 or 2.2 percentage points per year, the sales of new energy vehicles will be increased by 3.36 million, 1.68 million or 670,000 per year. Assuming that 50% of the original fuel vehicles are replaced, the net new energy vehicle sales will be about 1.68 million, 840,000 or 340,000 respectively, and the corresponding sales will be about 271.4 billion yuan, 135.7 billion yuan or 54.3 billion yuan respectively.

"The introduction of the new policy is largely in line with market expectations. In recent years, with the continuous improvement of environmental awareness and the rapid development of new energy vehicle technology, the market demand for more environmentally friendly and energy-saving vehicles has been increasing. The introduction of this policy is in line with this market trend, and promotes the green development of the automotive industry by encouraging the scrapping of high-emission passenger vehicles and the purchase of new energy vehicles. Wang Peng said.

The "trade-in" policy of local governments and car companies has been released one after another

At a time when the competition in the automotive industry is fierce, the "trade-in" policy has been placed on higher expectations by the market and enterprises.

Cui Dongshu, secretary general of the passenger association, said in an interview with the surging news reporter that the "old for new" pro-consumption policy has experienced many meetings and clear announcements since the end of last year, and consumers' attention and expectations for the policy are very high. For the impact of the "trade-in" policy, he believes that before 2016, the consumption power of the car buying group is stronger, and this time there is no rigid time requirement for the car family exchange group, and the purchase timing of the replacement group is more flexible, so the future "trade-in" has great potential to drive automobile consumption. Manufacturers' sales will also show a good trend in the off-season.

In fact, local governments and car companies have actively responded to the call and launched "trade-in" policy measures.

At the local level, on April 9, Shanghai issued a notice on the "2024 Implementation Rules for the "Trade-in" Subsidy for Old Cars in Shanghai. The implementation rules make it clear that from January 1, 2024 to December 31, 2024 (the following dates are inclusive), if an individual user purchases a new fuel passenger car with the National VIB emission standard, the registered use nature is non-operational, and within the specified period, scrap or transfer (excluding change of registration) the non-commercial fuel passenger car with the emission standard of China V and below registered in Shanghai under his name, Shanghai will give individual users a one-time car purchase subsidy of 2,800 yuan.

Jinan City, Shandong Province, has also launched a trade-in subsidy campaign, whereby individual consumers can apply for a one-time government subsidy if they transfer a non-commercial passenger car registered in Jinan under their own name and purchase a new passenger car from a participating car company, and the registered use nature is non-operational. The total amount of government subsidies is 50 million yuan, and consumers can enjoy the maximum amount of subsidies of 5,000 yuan.

According to the statistics of Everbright Securities Research Report, at least 13 regions have introduced trade-in policies in 2024.

Automobile companies have also launched corresponding activities.

Xiaopeng Motors told the surging news reporter that Xiaopeng Motors has also launched an official replacement policy, on the one hand, in response to the call of the country, and on the other hand, it also hopes to help consumers better replace and purchase vehicles. At present, Xpeng has a subsidy of up to 15,000 yuan for the replacement of the same brand, and a maximum subsidy of 10,000 yuan for the replacement of other brands.

The relevant person in charge of BYD told the surging news reporter that the "trade-in" of automobiles will help further release consumption potential, promote consumption upgrading, help energy conservation and emission reduction, accelerate the transformation of the new energy vehicle industry, and consolidate and expand the development advantages of new energy vehicles in the mainland. As a representative of the new energy vehicle industry, BYD will actively respond to national policies and use the ultimate technology and products to allow more consumers to enjoy the green environmental protection and better experience brought by new energy vehicles.

In addition, NIO and Geely have also launched various forms of redemption discounts in recent years. According to a research report by Everbright Securities, at least 17 car companies have released trade-in plans.

Source: The Paper