On July 24, the National Development and Reform Commission and the Ministry of Finance issued a notice on several measures to support large-scale equipment renewal and trade-in of consumer goods.
According to the notice, the two departments will make overall arrangements for about 300 billion yuan of ultra-long-term special treasury bond funds to support large-scale equipment renewal and consumer goods trade-in.
It is understood that the measure includes favorable policies for passenger cars, commercial vehicles, consumer markets and other tire fields, which are expected to bring significant favorable driving effects to the tire and auto clothing market with sluggish consumption. Here's a detailed analysis of these impacts:
Commercial vehicle and automotive tire market
ushered in a blockbuster benefit
1. The unprecedented amount of automobile subsidies has promoted the continuous growth of the automobile tire market
It is understood that the "several measures" have further increased the subsidy for the renewal of key areas, for example, for the scrapping and renewal of eligible vehicles, the subsidy standard will be increased from the previous subsidy of 10,000 yuan for the purchase of new energy passenger vehicles and 7,000 yuan for the purchase of fuel passenger vehicles to 20,000 yuan and 15,000 yuan respectively.
In the trade-in policy of consumer goods, the replacement of passenger cars for individual consumers will also promote the demand for car tires.
As consumers demand more from their vehicles for performance and safety, new or updated vehicles tend to opt for tires with better performance, thereby driving the growth of the passenger car tire market.
2. Old operating trucks are scrapped, and commercial vehicles are being replaced
According to the "Several Measures", it supports the scrapping and renewal of old operating trucks. Support the scrapping of diesel trucks operating with emission standards of China III and below, and accelerate the replacement of low-emission trucks.
scrap and renew the purchase of eligible trucks, with an average subsidy of 80,000 yuan per vehicle; There is no scrapping, only the purchase of eligible trucks, with an average subsidy of 35,000 yuan per vehicle; Only the old operating diesel trucks are scrapped in advance, with an average subsidy of 30,000 yuan per vehicle.
This measure not only helps to reduce the environmental pollution of old trucks, but also effectively motivates car owners to phase out old vehicles and replace them with new trucks that are more environmentally friendly and efficient, improving transportation efficiency, and thus promoting the sustainable development of the entire industry.
It not only helps to reduce the environmental pollution of old trucks, but also motivates owners to update their vehicles and improve transportation efficiency.
Through financial subsidies, car owners can be effectively incentivized to phase out old vehicles and replace them with new, more environmentally friendly and efficient trucks, thereby promoting the sustainable development of the entire industry.
A new round of elimination of old vehicles may speed up again, which will also stimulate the demand for replacement and renewal to a certain extent, and release a wave of new sales to the all-steel tire market.
China's automotive aftermarket set sail in the blue ocean
With the advancement of the car trade-in policy, a large number of old vehicles will be eliminated, and new or updated vehicles will require more after-sales services, such as tire replacement, maintenance and repair, etc. This will directly drive the growth of service demand in the automotive aftermarket.
According to the latest statistics released by the Ministry of Public Security, as of the end of June 2024, the number of motor vehicles in the country reached 440 million, including 345 million cars and 24.72 million new energy vehicles. China has become the world's largest automobile market in terms of passenger car ownership.
In addition, China's car ownership is still growing at a rapid rate of 20 million units per year, which will bring continuous incremental customers to the domestic automotive aftermarket.
It is understood that the market size of China's automotive aftermarket industry has reached 5.4 trillion yuan in 2023 and is expected to grow to 6.2 trillion yuan in 2024.
The average age of vehicles in China in 2022 is 6.2 years, far lower than the 12.2/12.3 years in the United States/European Union, and the average age of vehicles in China is expected to reach 8.0 years in 2027. Older vehicles often lead to more frequent maintenance and repairs, and car owners prefer cost-effective products and services.
With the maturity of the automobile market, a large number of passenger cars have entered the aftermarket, which has promoted the rapid development of the automotive aftermarket. Among them, the number of passenger cars that are more than 5 years old is the largest, reaching 156.9 million.
Therefore, various macro data and policy measures show that China's automotive aftermarket is still a blue ocean market with huge potential. However, as more and more "laymen" enter the automotive aftermarket, it also brings new challenges to the current auto service market.
Technological advantages, service upgrades and marketing innovation have become the three magic weapons for new auto service stores to compete in the new business format.
The outlook of China's automotive aftermarket industry is full of opportunities and challenges. Bosses need to keep up with market changes, seize opportunities, and continuously improve their own strength to cope with future competition and challenges. At the same time, the industry also needs to strengthen supervision and regulation to promote the healthy development of the entire industry.