The introduction of the "trade-in" policy ushered in new opportunities for consumption in the automotive industry

Caijing.com

2024-05-16 16:10Published on the official account of Beijing Finance and Economics

Recently, the "trade-in" policy in the automotive field has been introduced, and car companies have responded positively and launched large discounts.

On April 12, the Ministry of Commerce and 14 other departments issued the "Action Plan for Promoting the Trade-in of Consumer Goods" (hereinafter referred to as the "Action Plan"), focusing on the three major areas of automobiles, home appliances and home decoration, kitchen and bathroom, and put forward 22 measures in carrying out car trade-in and promoting the trade-in of household appliances.

On April 26, the Ministry of Commerce, the Ministry of Finance and other seven ministries and commissions jointly issued the "Implementation Rules for Automobile Trade-in Subsidy", which shows that from the date of issuance of the document to December 31, 2024, individual consumers who scrap fuel passenger cars 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 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.

According to Chinanews.com, some industry insiders said that automobiles, as an important pillar industry of the national economy, play an important role in national economic and social development due to its long industrial chain, high relevance, wide employment and large consumption. In the promotion of large-scale equipment renewal and consumer goods trade-in actions, relevant policies have been introduced at the national and local levels to solidly promote the trade-in of automobiles, promote the transformation and upgrading of the automobile industry, and stimulate market vitality.

Policies have been intensively introduced in various places

Chongqing Municipality pointed out that it will vigorously promote the trade-in of old cars, and give cash subsidies of 10,000 yuan and 7,000 yuan respectively to scrap old passenger cars with relevant standards and replace them with new energy passenger vehicles and energy-saving fuel vehicles; For eligible consumers who sell old passenger cars and exchange them for new new energy passenger cars, they will be given a municipal financial subsidy of 2,000 to 3,000 yuan per vehicle according to the price of the vehicle. In addition, support key automobile dealerships to carry out trade-in consumption activities to benefit the people, and give a maximum of 2 million yuan of municipal financial funds to the implementation of trade-in to benefit the people's consumption of automobile dealerships with obvious results and outstanding contributions.

Shanghai, Shandong, Hunan, Hubei and other places have also introduced relevant car trade-in plans and put forward target measures. Shanghai announced that fuel vehicles can apply for a one-time car purchase subsidy of 2,800 yuan, and new energy vehicles can apply for a one-time car purchase subsidy of 10,000 yuan; Jinan City, Shandong Province, issued implementation rules to provide a one-time subsidy to consumers who trade in the old for the new, with a total subsidy of 50 million yuan.

The Qingdao Municipal People's Government issued the "Implementation Plan for Promoting Large-scale Equipment Renewal and Trade-in of Consumer Goods in Qingdao". Among them, it is mentioned that it will promote the multiplication and development of passenger cars, increase the attraction and cultivation of core parts enterprises, plan to build a professional park for the automotive electronics industry, and create new competitive advantages for commercial passenger vehicles. By 2025, the city's new energy vehicle production will reach 400,000 units.

The Hunan Provincial Department of Commerce and the Hunan Provincial Department of Finance issued a notice on the 2024 "Preferential Purchase of Hunan Cars" car trade-in promotion, which introduces subsidy measures for car trade-in, including scrapping and renewal (scrapping and canceling old cars and buying new cars) and replacement and renewal (transferring old cars as second-hand cars and buying new cars), with a maximum government subsidy of 10,000 yuan for scrapping and renewing and a maximum government subsidy of 6,000 yuan for replacement and renewal.

Hubei has promoted more consumers to choose energy-saving vehicles in the form of central and local linkage. According to the national automobile scrapping and renewal subsidy policy, scrapping old cars to buy new energy vehicles can be subsidized 10,000 yuan, scrapping old cars to purchase energy-saving fuel vehicles, subsidies can be 7,000 yuan. On this basis, Hubei Province has also launched a subsidy for car replacement and renewal, and the transfer of old cars and the purchase of new cars can be subsidized by 2,000 yuan to 7,000 yuan according to the price and model.

The Ningxia Department of Commerce and 18 other departments jointly issued the "Implementation Plan for Promoting the Trade-in of Consumer Goods in Ningxia Hui Autonomous Region". In terms of scrapping and replacement in the automotive field, a one-time fixed subsidy will be given to individual consumers who scrap fuel passenger cars with emission standards of China III and below or new energy passenger vehicles registered before April 30, 2018 (including that day), and purchase new energy passenger cars or fuel passenger cars with a displacement of 2.0 liters and below that are included in the Catalogue of New Energy Vehicle Models Exempted from Vehicle Purchase Tax of the Ministry of Industry and Information Technology. Among them, the subsidy for the purchase of new energy passenger vehicles is 10,000 yuan, and the subsidy for the purchase of fuel passenger vehicles is 7,000 yuan. In terms of replacement and renewal, corresponding subsidies will be given to the transfer (excluding change of registration) of passenger cars under one's name, and the purchase and registration of new passenger cars as non-operating passenger cars in the zone. Among them, the maximum subsidy for the purchase of new energy passenger cars is 4,000 yuan/vehicle, and the maximum subsidy for the purchase of new fuel vehicles is 3,000 yuan/vehicle. The scrapping renewal subsidy and the replacement renewal subsidy cannot be superimposed, and the same person cannot enjoy it repeatedly.

According to the China Securities Journal, Wang Peng, an associate researcher at the Beijing Academy of Social Sciences, said that the car trade-in policy reduces the pressure on consumers to buy cars through financial subsidies, tax incentives and other measures, thereby stimulating consumer demand, which not only benefits consumers, but also helps to enhance the vitality of the automobile market.

A number of car companies responded positively

While various localities have introduced trade-in policies, car companies have also actively responded. Since the end of April, Mercedes-Benz has launched a limited-time activity of "changing policies, Mercedes-Benz doubles", and all passenger car users who meet the scope of the detailed rules and subsidies can receive a Mercedes-Benz maximum car purchase subsidy of 15,000 yuan for purchasing Mercedes-Benz applicable vehicles.

On the same day, Changan Automobile launched a limited-time campaign with a comprehensive subsidy of up to 57,000 yuan for a single vehicle, involving brands including Changan Qiyuan, Deep Blue Automobile, AVATAR, Changan Automobile and Changan Kaicheng.

Source: Chang'an official

FAW Audi has launched a full "new" experience benefit, with a replacement subsidy of up to 42,000 yuan for a limited time, while BMW can enjoy up to 18,000 yuan of insurance and purchase tax benefits or a preferential financing plan with 0 down payment and 0 interest rate on the basis of a one-time national subsidy for the purchase of BMW and MINI brand models.

FAW-Volkswagen released the "100 million yuan in one day" trade-in activity for all models, covering all its fuel vehicles and new energy models, with a maximum subsidy of 26,000 yuan for trade-in.

Source: FAW-Volkswagen official

BYD subsidizes up to 18,000 yuan for the replacement of Hantang family models, and can also enjoy financial policies such as 0 down payment and 0 interest.

In terms of new EV manufacturers, NIO has launched a "0 down payment" car purchase plan, which can enjoy an exclusive subsidy of up to 20,000 yuan for trade-in; Xpeng Motors has launched an official replacement subsidy policy, with a maximum subsidy of 15,000 yuan for the replacement of the Xpeng brand, and a maximum subsidy of 10,000 yuan for the replacement of other brands, while the replacement subsidy for the whole system is 6,000 yuan/unit, and the replacement subsidy for this brand is 3,000 yuan/unit.

Promote the recovery of the auto market and accelerate the penetration of new energy

According to the analysis of the Passenger Association, the car trade-in subsidy will bring an increase of one million vehicles to the private new car consumption in the car market, and can also bring an annual consumption increase of more than 100 billion yuan, and the car market is expected to sweep away the downturn in May to achieve recovery growth.

Cui Dongshu, secretary general of the passenger association, said that in May, there are a number of positive things that are expected to promote the growth of the auto market. With the implementation of the national trade-in policy, as well as the follow-up of corresponding policies and measures in various places, coupled with the gradual cooling of the price war in the auto market, the consumption of the auto market will be gradually stimulated.

According to Jiemian News, UBS analysis shows that the sales volume of the domestic auto market will still increase by 4% this year, and the increase mainly comes from the replacement of scrapped models. Measured by a 15-year scrapping cycle, China's auto market grew rapidly from 2008 to 2010, with annual passenger car sales soaring to 12 million units. According to estimates, the market demand brought by the scrapping and replacement of this batch of old cars will reach 8.2 million.

It is worth noting that in the car trade-in policies issued in various places, new energy vehicles are highlighted. This will help guide the green and low-carbon consumption of automobiles and enhance the sales growth momentum of new energy vehicles.

According to CCTV News, Liu Bin, chief expert of the China Automotive Center and deputy director of the China Automotive Strategy and Policy Research Center, believes that in the detailed rules, the scope of subsidies will be coordinated for new energy vehicles and fuel vehicles, and the subsidies for new energy vehicles will be higher than those for fuel vehicles, which can not only further guide the green and low-carbon consumption of automobiles, but also stabilize the consumption of fuel vehicles, and will better promote the transformation and upgrading of the automobile industry.

According to Chinanews.com, Xu Xingfeng, director of the Department of Market Operation and Consumption Promotion of the Ministry of Commerce, said, "On the basis of respecting the wishes of consumers, we will encourage the replacement of intelligent, green and low-carbon consumer goods."

According to SPDB International's research report, the implementation of the detailed rules of the car trade-in policy is expected to alleviate consumers' wait-and-see sentiment and greatly boost the willingness of potential consumers to buy cars, especially new energy vehicles. This year, China's NEV market demand is expected to be similar to last year, starting to gradually strengthen in the second quarter.

The article is synthesized from CCTV News, China Securities Journal, China News Network, China Economic Net, Jiemian News, etc.

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