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2024

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How can I trade in a car for a new one?

author:

Shi Yunyun


 

In order to boost the economy and stimulate consumption, "old for new" has become one of the key tasks to promote automobile consumption in China this year. Following the meeting of the Central Financial and Economic Commission at the beginning of the year once again emphasized to encourage and guide a new round of large-scale equipment renewal and consumer goods for new, and The State Council issued the "Action Plan to promote large-scale equipment renewal and consumer goods for new", Vice Minister of Commerce Sheng Qiuping said at the recently held China Electric Vehicle 100 Forum that the Ministry of Commerce will focus on the implementation of vehicles for new use this year. Focus on the whole industry chain and the whole process to expand the new energy vehicle market, and support the development of new energy vehicles. "Combined with the current development stage of the automobile market, structural trends and major risks, the current policy to promote automobile consumption should pay more attention to upgrading consumption." Wang Qing, deputy director of the Market Economy Research Institute of the Development Research Center of The State Council, said in a recent interview with our reporter that promoting the acceleration of the release of replacement demand is a policy force point with greater space and flexibility in the future period of time, and even can become a medium and long-term policy focus to promote automobile consumption.

 

01 Consumption promotion year to carry the banner of old for new

 

Since the beginning of this year, China has introduced a series of policies and measures to encourage the replacement of old cars with new ones.

 

On January 26, at the press conference held by the State New Office, the Ministry of Commerce proposed that 2024 will take the "Year of consumption promotion" as the main line to promote the continuous expansion of consumption, and automobiles and home appliances will become the focus;

 

On February 23, the fourth meeting of the Financial and Economic Commission of the CPC Central Committee stressed the need to promote the upgrading and technological transformation of various production equipment and service equipment, encourage traditional consumer goods such as automobiles and home appliances to be replaced by new ones, and promote the replacement of durable consumer goods with new ones.

 

On March 1, the executive meeting of The State Council deliberated and adopted the Action Plan to promote large-scale equipment renewal and the replacement of consumer goods with new ones, pointing out that we should actively carry out the replacement of consumer goods such as automobiles and household appliances with new ones, and form a scale effect of replacement;

 

On March 6, at the economic theme press conference held at the second session of the 14th National People's Congress, Zheng Hajie, director of the National Development and Reform Commission, said that it will carry out the replacement of durable consumer goods such as automobiles, home appliances and other durable consumer goods, eliminate old cars that meet the mandatory scrapping standards according to law and regulations, encourage and support consumers to replace old appliances with energy-saving appliances, and vigorously support the promotion of home aging transformation;

 

On March 13, The State Council issued the "Action Plan to promote large-scale equipment renewal and replace old consumer goods with new ones", which clearly proposed to organize the national automobile trade-in promotion activities and encourage automobile production enterprises and sales enterprises to carry out promotional activities.

 

A number of economists calculate that a new round of "old for new" consumer goods can bring 400 billion yuan of consumption increase in China, significantly boosting the consumer market.

 

Cui Dongshu, secretary general of the National Passenger Car Market Information Association, believes that this policy will greatly promote the development of the automobile consumer market this year, and is expected to bring more than one million passenger car updates.

 

But more importantly, encouraging the replacement of old cars will also adjust the market structure by replacing traditional "old" products such as high energy consumption and high pollution with "new" products such as green and intelligent products, and help the supply-side reform, so as to ultimately achieve the high-quality development of the industry.

 

Lack of confidence Policy constraints remain

 

To be fair, since the central government has repeatedly proposed to promote the replacement of old cars, both local governments and major car companies have "rived enough" to actively participate, many are out of their own pockets, real money to give subsidies and concessions, but from the front line feedback and comments from netizens, consumer response is not as enthusiastic as expected, and the consumption effect is not ideal.

 

Why is this happening?

 

The first reason, of course, is the lack of recovery in overall consumer confidence.

 

On March 18, the National Bureau of Statistics released the operation of the national economy in the first two months, the data showed that the total retail sales of social consumer goods in January and February achieved a year-on-year growth rate of 5.5% above market expectations (8 market institutions expected an average of 5%), but in fact this growth rate is not ideal, compared with the growth rate of more than 8% on the base of more than 8% before the epidemic. Obviously weak. The recovery in consumer confidence is also not ideal, with the consumer confidence index at 88.9 in January this year, which is still at a record low.

 

Specific to the automobile industry, some local policies are still the growth of China's automobile consumption, especially to promote the old for the new shackles.

 

"The future domestic car market consumption growth space is huge, of which, small and medium-sized cities and county and township market growth potential is predictable, megacities also have a lot of car consumption improvement space." Cui Dongshu pointed out that at present, the car ownership of some restricted cities has lagged far behind other non-restricted cities, taking into account the unlimited purchase, car ownership of 4 million to 5 million cities can still actively overcome the congestion pressure, it is recommended to consider the car ownership of less than 4 million cities gradually release the purchase of fuel vehicles.

 

03 Improve the recycling system cancel the relocation policy to provide financial support

 

At present, the national level of the implementation of the old car for new action plan and standard policy details are being stepped up, and it is reported that if it goes smoothly, it is expected to be introduced in the second quarter.

 

Under the new situation, how to accurately force the rules for replacing old cars with new ones in order to effectively eliminate the pain points of demand, so that consumers can change on a "voluntary basis"?

 

In Cui Dongshu's view, with the introduction of the national trade-in policy, the consumption potential of market elimination and renewal will gradually reflect, which will be beneficial to the gradual strengthening of the car market in March. He suggested to the media that it is necessary to speed up the circulation of used cars, facilitate the replacement of cars, reduce the number of used car transactions and reduce costs. At the same time, the policy of limiting the relocation of used cars will be completely abolished, and there will be no restriction on the relocation of used cars that meet the emission standards of in-use vehicles. The idea of low emission zones can be set, so that some areas become low pollution emission zones, and the driving vehicles are mainly electric vehicles and low fuel consumption vehicles, in order to reduce pollution and control flow.

 

Wang Qing also pointed out that it is necessary to promote auto credit consumption, and encourage commercial banks and auto finance companies to provide differentiated auto credit products in terms of interest rates and payment periods according to consumer credit status and models. Preferential interest rate or discount interest will be given to the replacement and renewal, especially the renewal of fuel vehicles into new energy vehicles. In addition, for consumers who replace and update vehicles, as well as for households to increase the purchase of vehicles, the car purchase limit city can also consider trading pure electric used cars, allowing licensed transfer and retaining the seller's new energy license index for 3 months.

 

On how to better promote consumers to replace and upgrade cars in the next policy, Guan Lixin, a researcher at the Circulation and Consumption Institute of the Research Institute of the Ministry of Commerce, also believes that the recycling system of renewable resources should be improved, on the one hand, it can improve the whole life cycle service of durable consumer goods, effectively solve consumers' worries, and better release consumption potential; On the other hand, it can unimpeded the renewal of the consumption cycle, promote the improvement of the efficiency of resource recycling, and optimize the consumption environment of exchanging old for new.

 

Automobile replacement is a systematic project, which requires production, supply and marketing, upstream and downstream, government, enterprises and people, online and offline synergies and comprehensive policies. It is hoped that the whole industry chain and all parties can work together to conduct reasonable guidance and incentives, effectively activate the potential of the consumer market, and thus help the automobile industry to create a new development pattern of "quantity and quality".

 

China Automotive News, March 28, 2024