Trade in the old for a month, save an average of 30,000 yuan for a new car, and the subsidy for fuel vehicles is greater?

Luka cars

2024-05-06 17:35Posted in Beijing Automotive Creators

It has been a month since the car trade-in policy was launched, and on the basis of government subsidies, various car companies have launched additional subsidy measures, and this subsidy war is comparable to a new round of price war.

Before December 31, 2024, subsidies will be given to individual consumers who scrap fuel vehicles with emission standards of China III and below or new energy passenger vehicles registered before April 30, 2018, and purchase new energy vehicles or vehicles with a displacement of 2.0 liters and below. Among them, the subsidy is 10,000 yuan for the purchase of new energy vehicles, and the subsidy is 7,000 yuan for the purchase of fuel vehicles with a displacement of 2.0 liters and below.

After the introduction of the trade-in rules, the Federation of Passenger Cars estimates that the sales of narrow passenger cars in April will be 1.6 million, a decrease of 5.3% month-on-month, of which the estimated sales of new energy vehicles will be 720,000 units, the same as the previous month, and the penetration rate will be 45%.

In other words, in the context of the price war, the Beijing Auto Show is full of new cars, coupled with the trade-in policy, at least in April, the effect of stimulating the auto market has not been seen. However, the auto market may change in May.

What are the specific changes in the auto market after a month of trade-in?

The state gives a subsidy of 7,000 yuan and 10,000 yuan for two different gears of the old and new vehicles, according to the ratio of 6:4 between the central and local governments.

For example, the implementation plan of Guangzhou Development Zone and Huangpu District can enjoy a replacement subsidy of up to 30,000 yuan per car; Suzhou City's 2024 car trade-in and car purchase subsidy policy has also been implemented, with a total subsidy of 100 million yuan, of which 50 million yuan for old and new purchases are each 50 million yuan; Nanjing has begun to issue 100 million yuan of automobile consumption subsidies on April 15, which can be reduced by 1,000 yuan on the basis of new car subsidies.

In terms of car companies, Chery launched a subsidy replacement policy of 10 billion yuan in March, and the purchase tax of designated models is fully exempted, and the maximum amount of old cars is 30,000 yuan. Geely launched a trade-in campaign of up to 53,000 yuan in April, FAW's independent and joint venture brands have a maximum subsidy of 50,000 yuan for trade-in bicycles, and Changan Automobile has achieved a subsidy of up to 57,000 yuan. BYD has also launched a subsidy policy, on the basis of a government subsidy of 10,000 yuan, a subsidy of 8,000 yuan for the purchase of the Dynasty series; it is not easy for Weilai and Xiaopeng, which are still in a loss-making situation, Weilai subsidizes up to 20,000 yuan for trade-in users, Xiaopeng subsidizes 15,000 yuan for its own brand, and subsidizes 10,000 yuan for other brand models.

In addition, BBA has also joined the ranks of replacement subsidy promotions. For models that meet the requirements of the detailed rules, Mercedes-Benz will receive a maximum subsidy of 15,000 yuan, and BMW will give an insurance and replacement subsidy of 18,000 yuan. Audi will give a replacement subsidy of up to 31,000 yuan, and FAW's models will be replaced by Audi, and a replacement subsidy of up to 45,000 yuan will be given.

Although the trade-in emphasizes a "change", the subsidy is so high that it is comparable to an "alternative" price war.

At the beginning, the superposition of the three BUFFs in April failed to drive sales growth, does it mean that the car market in May also tends to be flat. Separately, the price war that has continued since the end of February has tended to be flat, and there has been no obvious trend of price changes that can directly stimulate nerves, which means that this round of price war is coming to an end. Secondly, a number of blockbuster models are piled up on the market, as well as the Beijing Auto Show at the end of the month, which is another reason for the cold car market in April, which is another victory of the "waiting party". Finally, although the trade-in rules were introduced at the end of March, car companies followed up on a large scale, basically in late April or at the end of April.

In other words, all the BUFF bonuses in April are likely to be used as wedding dresses for the car market in May.

Since the launch of the Ideal L6, the cumulative number of Dading has exceeded 40,000 units, and the order volume of Hongmeng Zhixing has reached 6,600 units in the first three days of the May Day holiday. In addition, Xiaomi SU7 orders are still growing, and deliveries will increase month by month, fuel vehicles are stimulated by subsidies, and even Dongfeng Nissan, which has been in a slump before, has also received more than 21,000 orders during the May Day Golden Week. In other words, in May, the overall market will show a positive trend under the stimulus of new cars and trade-ins.

The trade-in subsidy is comparable to a new round of price war, will the real price war come soon?

This round of concession subsidies for car companies is likely to be put in the trade-in, and a new round of price war may have to wait until this round of subsidies is over.

The only difference between trade-in and price war is that trade-in requires the replacement of old cars. The replacement of old cars is divided into two steps, if according to the implementation of the old for new rules, the national three or less, or more than 6 years of new energy vehicles, can go through the scrapping procedure, respectively, subsidies of 7,000 yuan and 10,000 yuan. If it is directly replaced at the dealership, the dealer will first estimate the price of a used car, which will be superimposed on the purchase price, and then give an additional part of the preferential policy, that is, the preferential policies of each company as mentioned above.

Taking Mercedes-Benz as an example, if the user has a second-hand car with an estimated value of 10,000 yuan, the price after the replacement is first reduced by 10,000 yuan of valuation, and then the Mercedes-Benz can be given a discount of up to 15,000 yuan, which is equivalent to a discount of 25,000 yuan on the basis of the discount.

Of course, it is not excluded that some car companies will narrow the preferential range of price wars after giving trade-in subsidies, but at present, from the perspective of each car company alone, starting from 20,000 at every turn, the replacement subsidy of up to nearly 60,000 If the old car is really replaced, even if the preferential policies of some brands are narrowed, the replacement policy can also fill the preferential gap.

Roughly calculating the subsidy amount given by several mainstream car companies participating in the trade-in subsidy, including policy subsidies, including various new energy vehicle companies and traditional car companies, the average subsidy amount of Chery, Geely, Changan and other car companies is about 30,000, luxury brands are slightly lower, and can reach 20,000, and new energy car companies are basically within 20,000.

That is to say, the models in various price ranges of traditional car companies, driven by the trade-in, can be directly reduced by one level, such as 150,000-level models, which can be reduced to 100,000 levels, and 200,000-level models can be reduced to 150,000 levels. Luxury brand models, taking Mercedes-Benz C200L sports version as an example, if calculated according to the subsidy of the top grid, superimposed on the current discount, the new car only needs 200,000 yuan. The Audi A4L 40 TFSI is stylish and sporty, and can be reduced to less than 200,000.

The policy gives new energy replacement subsidies higher, why do they superimpose subsidies for car companies, but less? Or the old reason, the profits of new energy car companies are relatively low.

It is not difficult to see from the financial reports of various Chinese car companies in 2023 that among the new energy car companies, BYD and Ideal have profitability and considerable profit margins, and the rest, including Weilai, Xiaopeng, Cialis, Leap and other car companies, still have negative net profits, but fortunately, the net profit of some car companies has increased year-on-year, and there is the potential to get rid of the "unprofitable hat".

The trade-in seems to give users a greater preferential policy for buying a car, but in fact, it is to give car companies a chance to breathe when the price war is about to be uncontrollable, after all, not all car buyers will "trade in the old for the new", and do not need to subsidize every car in place. In other words, this round of preferential subsidies, car companies have given the old for the new, which means that the price war of pure cash concessions may have to rest.

Epilogue:

The ultimate goal of trade-in is not only to boost the auto market, but also to accelerate the elimination of fuel vehicles below the third national level. Lang Xuehong, deputy secretary-general of the China Automobile Dealers Association, believes that the replacement cycle of fuel vehicles is generally 6-8 years, and that of new energy vehicles is 3-5 years.

After the Beijing Auto Show, a new round of "price war" is not to fight for discounts, but to see how trade-in stimulates the market.

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Personal opinion, for reference only