Can the introduction of measures to encourage car consumption save the car market?

Affected by the new crown pneumonia epidemic, my country’s automobile market has been severely impacted. With the continuous improvement of the domestic new crown pneumonia epidemic situation, how to restart automobile consumption has become the focus of the entire industry. Recently, from the central to local governments, relevant departments and prefectures in my country have taken active actions to introduce measures to encourage automobile consumption. While the majority of auto companies are actively resuming work and production, they are improving the technical content of their products and attracting market attention. Can the auto market usher in a turnaround? How to be activated?

In order to stimulate the pent-up demand for automobile consumption, as early as early February this year, Foshan City took the lead in launching a policy, proposing to encourage the consumption of vehicles with “National VI” standard displacement, and to give subsidies ranging from 2,000-5,000 yuan per vehicle. According to data recently released by the China Association of Automobile Manufacturers, in February this year, the production and sales of automobiles fell sharply. The production and sales of automobiles in the month reached 285,000 and 310,000 respectively, down 83.9% month-on-month and 79.8% and 79.1% year-on-year. Subsequently, Guangzhou proposed to enjoy a subsidy of up to 10,000 yuan for the purchase of new energy vehicles and 3,000 yuan for the purchase of replacement “National VI” new cars. Measures to promote the upgrade of automobile consumption were also introduced in Longhua District, Shenzhen. Tian Shanshan, general manager of a car 4S shop in Shenzhen, told reporters: “Our Longhua District Commerce Bureau has recently conducted some online group buying activities for automobiles. For example, consumers can buy a ‘National VI’ car from us. Enjoy some additional government subsidies, such as cash subsidies ranging from two thousand to several thousand yuan.”

According to the latest statistics from the China Automobile Dealers Association on March 31, the resumption rate of dealership stores reached 95.5%, and the passenger flow recovery rate reached 64%. The domestic auto market is gradually returning to the right track. While actively resuming work and production, some car companies and related parts manufacturers are also paying more attention to how to improve the technical content of their products. Zhang Wengen, Deputy Chief Economist of JAC, said: “In the field of private vehicles, the epidemic has not only restrained consumption behavior, but also put forward requirements for healthier and safer. We continue to insist on technological innovation and integrate our intelligent health and safety system. It is gradually applied to new products, providing users with a smarter, healthier and safer travel solution.”

The analysis believes that with the return of automobile production and sales to normal, coupled with a series of stimulus policies with gold content, the rigid demand for automobile consumption is accelerating. However, Cui Dongshu also pointed out that from the recent sales data, although the automobile consumption market has recovered, there is still a big gap from the automobile consumption in the same period of previous years. For the market, it still needs to digest the reaction time. Cui Dongshu said: “For example, the retail sales of our auto market in February was about 20% of the level of the same period, and in March it reached about 60% of the level of the same period in the same period. By April, we estimate that it will recover to the level of 80% in the same period last year.”

Since the outbreak of the epidemic, the central and local governments at all levels have successively issued policies and measures to promote automobile consumption. At present, judging from the measures to promote automobile consumption that have been introduced in Guangzhou, Hangzhou, Changsha, Zhuhai, Foshan, Nanchang, Nanjing, Ningbo and other places, they mainly include increasing the quota of small passenger cars, subsidies for purchasing new cars or new energy vehicles, subsidies for car trade-ins, and the introduction of Different forms of consumer coupons or direct transfer of interest, etc. Fu Bingfeng, executive vice president of the China Association of Automobile Manufacturers, believes that these measures are timely and effective. “This time the epidemic has forced us to quickly introduce some policies on the consumer side and the market side to solve some conflicts and release the market. Some regions have quickly introduced some policies to stimulate consumption. I think these are very important for the automotive industry. Very timely and effective.” Fu Bingfeng said.

According to Cui Dongshu, secretary general of the National Passenger Vehicle Market Information Association, the introduction of a series of policy measures will effectively stimulate the demand for first-time car purchases. “The original consumer groups without cars will increase their confidence in promoting the stability of consumption through stimulus policies, and then promote the release of consumption, so that the groups without cars can accelerate the purchase of cars, which will make the basis of our car market bigger and promote the consumption of the entire car market. .”

In order to promote automobile consumption, the State Council executive meeting held a few days ago issued preferential policies to extend the new energy vehicle purchase subsidies and vehicle purchase tax exemption policies that expire at the end of the year for two years. To the end of 2023, VAT will be reduced by 0.5% of sales. Cui Dongshu said that this is undoubtedly an important benefit for auto companies under pressure. He said: “The policy of the State Council executive meeting to promote automobile consumption should be a combination of long and short policies. For new energy vehicles, it will improve the overall environmental quality, and at the same time, it will promote the development of large groups of used car dealers. effect.”

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