After nearly 15 years, the mainland once again launched a trade-in program for consumer goods such as automobiles, and industry experts pointed out that the car trade-in policy will help stimulate the demand for car renewal, promote the growth of automobile sales, and at the same time, it can also promote the green transformation of the mainland's automobile industry by encouraging consumers to scrap high-emission vehicles and buy new energy vehicles instead. In addition, it can also promote the vigorous development of the recycling industry, and make a greater contribution to economic growth and environmental protection!
Zhao Chenxin, deputy director of the National Development and Reform Commission, said that the demand for this round of renewal 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.
Cui Dongshu, secretary general of the passenger association, said that the implementation of the policy is a major benefit to the car market, and it is expected that the total amount of scrap should reach nearly 10 million yuan, and the car trade-in subsidy will bring millions of increments to private new car consumption in the car market, and can also bring more than 100 billion yuan of annual consumption increments.
The Bank of China Research Institute pointed out in a recent research report that if the current round of consumer goods "trade-in" policy is combined with preferential policies such as new energy vehicles and new home appliances to the countryside, it is expected to release greater consumption potential.
The trade-in action plan was released
In March this year, the State Council issued the "Action Plan for Promoting Large-scale Equipment Renewal and Consumer Goods Trade-in", which requires the overall expansion of domestic demand and deepening the supply-side structural reform, the implementation of equipment renewal, consumer goods trade-in, recycling, and standard improvement. By 2027, the recycling volume of scrapped vehicles will about double compared with 2023, the transaction volume of second-hand cars will increase by 45% compared with 2023, and the recycling volume of waste household appliances will increase by 30% compared with 2023, and the proportion of recycled materials in the supply of resources will be further increased.
On April 12, the Ministry of Commerce and 14 other departments jointly issued the Action Plan for Promoting the Trade-in of Consumer Goods. 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 plan requires that fiscal and financial policy support be increased, and the central government and local governments will be linked 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 plan also proposes to accelerate the elimination of passenger cars with emission standards of China III and below by 2025 by increasing policy guidance and support; End-of-life vehicle recycling will increase by 50% compared to 2023; By 2027, the amount of end-of-life vehicles recycled will double compared to 2023.
Follow up the relevant plans in multiple places and clarify the goals of the future plan
After the State Council issued the plan, many places have recently issued relevant local plans to clarify the growth plan of scrapped car recycling and second-hand car transaction volume in the next few years. The details are as follows:
Yunnan: By 2027, the recycling volume of end-of-life vehicles will about double compared to 2023, and the transaction volume of used cars will increase by 45% compared to 2023
The Yunnan Provincial People's Government recently issued the "Implementation Plan for Promoting Large-scale Equipment Renewal and Trade-in of Consumer Goods". It is mentioned that by 2027, the scale of equipment investment in industry, agriculture, construction, transportation, education, cultural tourism, medical and other fields will increase by more than 25% compared with 2023. The energy efficiency of the main energy-using equipment in key industries has basically reached the energy-saving level, the proportion of production capacity with environmental protection performance reaching the A-level has been greatly improved, and the penetration rate of digital R&D and design tools and the numerical control rate of key processes in industrial enterprises above designated size have exceeded 90% and 75% respectively. The recycling volume of scrapped vehicles will about double compared with 2023, the transaction volume of second-hand cars will increase by 45% compared with 2023, and the recycling volume of waste household appliances will increase by 30% compared with 2023, and the proportion of recycled materials in the supply of resources will continue to increase.
Jiangxi: Aiming to double the recycling volume of scrapped cars by 2027 compared with 2023, and increase the transaction volume of used cars by 45%
The Jiangxi Provincial People's Government issued the "Implementation Plan for Promoting Large-scale Equipment Renewal and Consumer Goods Trade-in in Jiangxi Province", aiming to increase the scale of equipment investment in industry, agriculture, construction, transportation, education, cultural tourism, medical and other fields by more than 25% compared with 2023 by 2027, the energy efficiency of major energy-using equipment in key industries has basically reached the energy-saving level, the recycling volume of scrapped vehicles will increase by about double compared with 2023, and the transaction volume of second-hand cars will increase by 45% compared with 2023.
Jilin: By 2027, the recycling volume of scrapped cars will about double compared with 2023, and the transaction volume of used cars will increase by 45%
The Jilin Provincial People's Government recently issued the "Implementation Plan for Promoting Large-scale Equipment Renewal and Consumer Goods Trade-in in Jilin Province". It is mentioned that by 2027, the scale of equipment investment in industry, agriculture, construction, transportation, education, cultural tourism, medical care and other fields will increase by more than 25% compared with 2023; The proportion of production capacity with environmental performance reaching the A-level has been significantly improved, and the penetration rate of digital R&D and design tools and the numerical control rate of key processes in industrial enterprises above designated size have exceeded 90% and 75% respectively. The recycling volume of end-of-life vehicles will about double compared with 2023, the transaction volume of second-hand cars will increase by 45%, the recycling volume of waste household appliances will increase by 30%, and the proportion of recycled materials in the supply of resources will further increase.
Henan: Strive to increase the recycling volume of scrapped vehicles by 50% by 2025 compared with 2023
The Henan Provincial Department of Commerce and other 19 departments recently issued the "Henan Province Implementation Plan for Promoting the Trade-in of Consumer Goods" to carry out the trade-in of automobiles and home appliances and the "renewal" of home decoration, kitchen and bathroom in the province, and strive to increase the recycling of scrapped vehicles by 50% compared with 2023 by 2025, and the recycling of waste household appliances by 15% compared with 2023.
Hainan: Carry out car trade-in by the end of 2024 to recycle 15,000 scrapped vehicles
The Hainan Provincial People's Government issued the "Implementation Plan for Large-scale Equipment Renewal and Trade-in of Consumer Goods in Hainan Province", which mentions that by the end of 2024, 15,000 scrapped vehicles will be recycled, and 205,000 second-hand cars will be traded, an increase of 15% over 2023; By the end of 2027, the recycling volume of scrapped vehicles will increase by 1.5 times compared with 2023, the transaction volume of second-hand cars will increase by 50% compared with 2023, and the recycling volume of waste household appliances will increase by 30% compared with 2023, and the proportion of recycled materials in the supply of resources will be further increased. In addition, it also mentioned that enterprises should be encouraged to provide high-quality services, expand the scope of sales, and continue to carry out new energy vehicle promotions. We will systematically promote the construction of charging and swapping infrastructure, and accelerate the improvement of a unified charging and swapping network service and supervision platform in Hainan Province. Eliminate old vehicles that meet the scrapping standards in accordance with laws and regulations, and continue to implement relevant subsidy policies such as scrapping and replacing new energy vehicles with old vehicles.
Ministry of Commerce: Trade-in for new cars to enjoy subsidies!
He Yadong, spokesman of the Ministry of Commerce, said that on April 24, the Ministry of Commerce, the Ministry of Finance and other 7 departments jointly issued the "Implementation Rules for Automobile Trade-in Subsidy", which clarified that from the date of issuance of the document to the end of 2024, individual consumers will be given a one-time fixed subsidy if they scrap eligible old cars and purchase eligible new energy vehicles or energy-saving vehicles. In addition, the car trade-in subsidy policy can be enjoyed in conjunction with the purchase tax reduction and exemption of new energy vehicles, financial credit support for car purchases, and preferential treatment for enterprises.
According to the Detailed Rules, from the date of issuance of the Detailed Rules to December 31, 2024, individual consumers who scrap fuel passenger vehicles with emission standards of China III and below or new energy passenger vehicles registered before April 30, 2018, and purchase new passenger cars that meet the energy-saving requirements can enjoy a one-time fixed subsidy. Among them, a subsidy of 10,000 yuan will be given to those who scrap the above two types of old passenger cars and purchase eligible new energy passenger vehicles; For scrapping fuel passenger cars with emission standards of China III and below and purchasing fuel passenger cars with a displacement of 2.0 liters and below, a subsidy of 7,000 yuan will be provided.
Industry insiders pointed out that the model subsidy of scrap subsidy is two lines, scrapped fuel vehicles can be replaced with new energy vehicles and fuel vehicles, but scrapped new energy vehicles can only buy new energy vehicles, so it brings a greater possibility of new energy purchase.
According to the research report of Minsheng Securities, according to the statistics of motor vehicle insurance data, by the end of 2023, the number of fuel passenger vehicles with emission standards of China III and below will be about 13.708 million, and the number of new energy passenger vehicles with an age of more than 6 years will be about 837,000, so the number of eligible old cars will be about 14.545 million. After the implementation of the trade-in policy, the demand for the replacement of fuel passenger vehicles with emission standards of China III and below is expected to be dominated by low-end vehicles, and the demand for new energy passenger vehicles by April 2018 is expected to be dominated by mid-to-high-end new energy vehicles. Combined with the increase and the change in ownership, it is expected that the scrapping and replacement in 2024 will bring about 1 million incremental units to the domestic market.
(Note: Fuel passenger vehicles with emission standards of China III and below refer to gasoline passenger vehicles registered before June 30, 2011, and diesel passenger vehicles and other fuel types registered before June 30, 2013.) China III emission standards for light-duty gasoline vehicles were implemented nationwide on July 1, 2008. For passenger cars with emissions of China III and below, they are more than 13 years old, the vehicle is in poor condition, and the emission pollution is serious. ）
Local subsidy policies have been introduced:
Shanghai: 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 National V emission standard and below registered in Shanghai under his name, Shanghai will give the individual user a one-time car purchase subsidy of 2,800 yuan.
Zhejiang: The policy of exchanging old goods for new ones adopts the provincial, municipal and county financial departments to exert efforts in the same direction, including automobiles, home appliances and other fields. A one-time subsidy will be given to consumers who scrap fuel passenger cars with emission standards of China III and below or new energy passenger vehicles registered before April 30, 2018. On this basis, the scope of car subsidies will be expanded to vehicles of China IV and above standards, and this policy can be superimposed to enjoy car purchase subsidies in various places. At the same time, the province's recycling and dismantling qualification enterprises will carry out online car collection, free trailer and other services, and encourage and support the expansion of second-hand car exports.
Jinan City, Shandong Province: 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.
Yunnan: For consumers who scrap old cars and buy new cars, Yunnan Province will give a subsidy of 7,000 yuan or 10,000 yuan according to relevant policies.
Shenzhen: From April 24, 2024 to December 31, 2024, a one-time fixed subsidy will be given to individual consumers who scrap fuel passenger vehicles with emission standards of China III and below or new energy passenger vehicles registered before April 30, 2018 (including that day, the same below), and purchase new energy passenger vehicles or fuel passenger vehicles with an displacement of 2.0 liters and below that are included in the Catalogue of New Energy Vehicle Models for Reduction and Exemption of Vehicle Purchase Tax issued by the Ministry of Industry and Information Technology. Among them, for scrapping the above two types of old cars and purchasing new energy passenger vehicles, a subsidy of 10,000 yuan; For scrapping fuel passenger cars with emission standards of China III and below and purchasing fuel passenger cars with a displacement of 2.0 liters and below, a subsidy of 7,000 yuan will be provided. Eligible applicants can apply for subsidies through the website of the "National Automobile Circulation Information Management System" and the "Car Trade-in" Mini Program before January 10, 2025. In terms of replacement and renewal subsidies, during the event, individual consumers who purchase cars (including new energy vehicles and fuel vehicles) in automobile sales enterprises in our city through the method of "replacement and renewal" (selling old cars and buying new cars) and complete the registration will be subsidized in accordance with the principle of classification and classification. Among them, if the purchase price is 70,000 yuan (inclusive) to 150,000 yuan (exclusive), the subsidy for the purchase of new energy vehicles is 3,000 yuan/vehicle, and the subsidy for fuel vehicles is 2,000 yuan/vehicle; If the purchase price is 150,000 yuan (inclusive) to 250,000 yuan (exclusive), the subsidy for the purchase of new energy vehicles is 5,000 yuan/vehicle, and the subsidy for fuel vehicles is 4,000 yuan/vehicle; If the purchase price is more than 250,000 yuan (inclusive), the subsidy for new energy vehicles is 8,000 yuan/vehicle, and the subsidy for fuel vehicles is 7,000 yuan/vehicle.
(Note: According to the policy, the subsidy funds for car trade-in are shared by the central and local governments in a ratio of 6:4, and the specific sharing ratio is determined by region.) Among them, the eastern provinces will be shared in a ratio of 5:5, the central provinces will be shared in a ratio of 6:4, and the western provinces will be shared in a ratio of 7:3. The provincial finance department shall take the lead in implementing the part of the local burden. ）
In order to seize this wave of policy-led outlets, major automobile companies have also launched corresponding subsidy policies:
Xpeng Motors: At present, there is 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.
BYD: Launched a preferential car purchase policy for each model of its Dynasty Network, and the bicycle replacement subsidy is up to 18,000 yuan.
Changan Automobile: Combined with state subsidies and Changan subsidies, there are 17 models, with a maximum comprehensive subsidy of 57,000 yuan, and the event will be held from April 27 to May 8.
The Hongqi brand has updated the direct replacement subsidy for limited-time car purchases, covering a variety of its models, with a maximum subsidy of 50,000 yuan.
Automobile replacement and renewal bring a trillion-level market and is expected to release greater consumption potential
It has been almost 15 years since the last round of the "trade-in" policy was introduced. After the launch of the "Implementation Plan for Promoting the Expansion of Domestic Demand and Encouraging the "Trade-in" of Automobiles and Household Appliances (2009), the consumption of automobiles has been significantly driven.
According to CITIC Securities, in the last round of "trade-in" from 2009 to 2011, the government issued 6.41 billion yuan of automobile subsidies in 2010, driving 49.6 billion yuan of new car consumption. In 2009 and 2010, China's total automobile sales increased by 46.1% and 32.4% respectively, which was the fastest growth rate in the past 20 years.
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". Therefore, the function, quality, cost-effectiveness, service, after-sales and conversion of consumption concepts of the product are the key points.
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.
The number of cars in mainland China exceeds 430 million, and the recycling and dismantling industry is a windward outlet
Since 2010, the development of the mainland's automobile industry has continued to accelerate, and the number of cars in the country has increased significantly. According to the statistics of the Ministry of Public Security, in 2023, the number of motor vehicles in the country will reach 435 million, including 336 million cars, and the number of motor vehicle drivers will reach 523 million, of which 486 million will be car drivers. By the end of 2023, the number of new energy vehicles in the country will reach 20.41 million, accounting for 6.07% of the total number of vehicles; Among them, the number of pure electric vehicles is 15.52 million, accounting for 76.04% of the total number of new energy vehicles. In 2023, the number of automobile transfer registrations will continue to grow, the second-hand car trading market will be active, and the national public security traffic management departments will handle a total of 34.15 million motor vehicle transfer registration businesses, of which 31.87 million will be automobile transfer registration businesses, accounting for 93.32%.
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.
According to the statistics of the China Automobile Dealers Association, the transaction volume of used cars in mainland China in 2023 will be about 18.41 million, a year-on-year increase of 15%, and the transaction amount will be about 1,179.5 billion yuan, which is equivalent to the unit price of second-hand cars will be about 64,000 yuan per vehicle; According to the policy target of increasing the second-hand car transaction volume by 45% in 2027 compared with 2023, it is expected that the second-hand car transaction volume in mainland China will reach 26.7 million units in 2027.
With the approaching peak of scrapping and policy support, the automobile dismantling industry has ushered in development opportunities. Recycling is not only conducive to promoting investment and consumption, but also an important starting point for promoting industrial upgrading and achieving carbon neutrality.
GF Securities believes that due to the influence of policies, it is expected that the automobile recycling and dismantling industry will form an industrial scale of 100 billion yuan after 2025. In the past two years, the sales of new energy vehicles have surged, driving the rapid start of the power battery recycling market. Considering that the dismantling value of batteries after recycling exceeds 30,000 yuan, it is expected that the overall market space will exceed 260 billion yuan by 2030.
The research report of Soochow Securities pointed out that the policy drives industry norms and reshapes the competitiveness of automobile recycling and dismantling enterprises. Renewable resources are generally faced with industry pain points such as non-standard upstream recycling channels, scattered midstream recycling patterns, difficult to reflect technology and scale advantages, and difficult to reflect the value of downstream renewable resource products, and their development is hindered. The series of policies for the trade-in of old cars continue to guide and standardize the recycling and dismantling links of the industry, including: 1) Upstream: improve the recycling network and guide enterprises to improve the level of recycling services; 2) Midstream: on the one hand, promote agglomeration and large-scale development, guide the gradual withdrawal of inefficient production capacity, and on the other hand, encourage scrapped vehicle recycling and dismantling enterprises to improve the level of high-value comprehensive utilization of resources, extend and expand to downstream steel, non-ferrous metals, parts remanufacturing and other industrial chains, and support enterprises to become bigger and stronger; 3) Standardize the recycling and dismantling of scrapped vehicles, and the materials required for individual consumers to apply for subsidies shall be issued by qualified scrapped motor vehicle recycling and dismantling enterprises. Compared with other renewable resources, scrapped cars have a low degree of non-standard and a high degree of standardization, and the policy continues to promote industry norms, and high-quality head automobile recycling and dismantling enterprises have benefited significantly. The trade-in of automobiles promotes the recycling and dismantling space of the market after the release, and the industry continues to standardize the reshaping of the competitiveness of leading companies.
The number of scrapped cars is growing rapidly, and relevant policies and regulations need to be improved urgently
With the rapid growth of car ownership, the number of scrapped cars is also growing rapidly. According to Cui Dongshu, secretary general of the passenger association, if scrapped in 15 years, the number of scrapped passenger cars will be about 5.67 million in 2023, 8 million in 2024, and 11.33 million passenger cars in 2025, with an extremely rapid increase. It is expected that there will be 13.66 million passenger cars in 2027, and the scale of commercial vehicle renewal should reach 15 million units.
However, the current situation of the industry is that many scrapped vehicles are not recycled through formal channels, but flow into the "black market" and are illegally disassembled and assembled, causing serious safety and environmental hazards. The same is true for power battery recycling, according to official statistics, the proportion of power batteries recycled through formal channels currently does not exceed 25%. In addition, the lack of standardized and efficient recycling channels and the establishment of clear price evaluation standards also need to be solved urgently.
Hu Qingpei, director and researcher of the China Biodiversity Conservation and Green Development Foundation, said: "In 2023, more than 580,000 tons of waste batteries will be retired in the mainland, and by 2025, the number will reach 820,000 tons, and after 2028, this number will exceed 2.6 million tons." That's a huge number, and it's going to continue to grow in recent years. ”
At present, the implementation of the trade-in policy is in its infancy, and in the face of the huge recycling tide in the future, the improvement of relevant policies and regulations, the improvement of the regulatory system, and the improvement of the recycling system need to keep up.
Cui Dongshu said that for individual consumers, the automobile scrapping system has not been very smooth, and the formal scrapping of automobiles is mainly a policy scrap before going to the scrapping and dismantling point. Some consumers don't know where the scrapping outlets are, and scrapping will delay time and energy, which is far less convenient than selling second-hand cars directly to automobile 4S stores and then replacing them with new cars. In particular, many replacements are new cars with good plates, and the old cars are directly driven away from the new cars, which is very convenient. It is expected that auto dealers should do a good job in service, run more errands for consumers, and realize the integrated service of scrapped vehicle delivery and purchase of new cars, which is not only conducive to the implementation of the national scrapping and renewal policy, but also conducive to consumer car purchase services.
The latest auto market performance: exports hit a new high in April Retail sales in the auto market in May will be better than in April
Exports: According to customs statistics, the total export of automobiles in April was 556,000 units, a year-on-year increase of 31%, and the cumulative export of automobiles from January to April was 1.878 million units, a year-on-year increase of 26%. Passenger vehicle exports (including finished vehicles and CKD) in April totaled 417,000 units, reflecting a 38% y/y increase and a 0.2% m/m increase, setting a record monthly export volume. Passenger car exports from January to April totaled 1.491 million units, reflecting a 37% y/y increase. New energy vehicles accounted for 27.1% of total exports in April, down 2.9 percentage points from the same period last year. With the recovery of markets such as South America, exports of domestic brands reached 343,000 units in April, reflecting a 41% y/y increase and a 0.1% m/m increase. Exports of joint ventures and luxury brands totaled 70,000 units, reflecting a 30% y/y increase.
Production: Passenger car production in April was 1.988 million units, up 14.9% y/y and down 9.6% m/m. Passenger car production in April was 18,000 units higher than the record high of 1.97 million units in the same period in 2018. Among them, the production of luxury brands increased by 7% year-on-year and decreased by 13% month-on-month; The production of joint venture brands decreased by 10% year-on-year and 18% month-on-month; The production of domestic brands increased by 30% year-on-year and decreased by 5% month-on-month.
New energy market: The production of new energy passenger vehicles in April was 802,000 units, up 33.5% year-on-year and 0.9% month-on-month. Wholesale sales of new energy passenger vehicles in April were 785,000 units, up 30.0% year-on-year and down 3.7% month-on-month. Retail sales of new energy vehicles in April totaled 674,000 units, up 28.3% y/y and down 5.7% m/m. NEV exports in April totaled 115,000 units, reflecting a 26.8% y/y increase and a 4.1% m/m decline.
According to the Passenger Association, the "Implementation Rules for Automobile Trade-in Subsidy" clarifies the subsidy policy for automobile trade-in funds. The implementation of the trade-in policy is a major positive for the auto market, although the holiday time in May is long, but it is expected that the retail sales of the auto market in May will be better than in April. Since the Spring Festival, consumers have paid attention to the trade-in policy, looking forward to the policy to bring benefits to the purchase of cars, so the implementation of the policy is a major benefit to the car market, the total annual scrap is expected to reach the scale of nearly 10 million, the car trade-in subsidy for the car market private new car consumption will bring millions of increments, can also bring more than 100 billion yuan of annual consumption increment, the car market is expected to sweep the downturn in May to achieve recovery growth. It is expected that the financial effect of the subsidy policy will also be significant, with a preliminary estimate of the output value of 1 yuan subsidy input, which can pull the ratio of 1:15, and the tax pull ratio of 1 yuan of financial subsidy for private scrapping and renewal is 1:3.
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