Before the Spring Festival of the Year of the snake, automobile consumption and other major good news.

 

On January 8, the National Development and Reform Commission and the Ministry of Finance jointly issued the Notice on the implementation of large-scale equipment Renewal and Consumer Goods Trade-in Policy in 2025, which clarified the continuation of the automobile trade-in policy in 2025.

 

The scale of funds is larger, the policy subsidy cycle is longer, and the subsidy scope is wider, and it is expected that consumers will get more benefits when buying cars in 2025, and the car market will continue to thrive.

 

01 The subsidy scope is larger and the subsidy standard is more perfect

 

The continuation of the "two new" subsidies is the demand of the industry to stabilize the automobile market, and it is also the urgent desire of consumers. In fact, the intensity of the "two new" policies in 2025 is more "generous" than expected.

 

Lang Xuehong, deputy secretary-general of the China Automobile Circulation Association, analyzed that, first of all, the New Deal expanded the scope of automobile scrapping renewal support. Fuel vehicles expanded from country three and below to some countries four and below, expanding for 1 year, and new energy vehicles expanded for 8 months. According to the first registration time of vehicles, gasoline passenger cars will be expanded from June 30, 2011 to June 30, 2012, diesel and other fuel passenger cars will be expanded from June 30, 2013 to June 30, 2014, and new energy passenger cars will be expanded from April 30, 2018 to December 31, 2018.

 

Secondly, the New Deal improves the subsidy standards for automobile replacement and renewal, and sets the upper limit of the subsidy standards for replacement and renewal and the requirements for the holding time of old cars from the central level. Individual consumers transfer passenger cars registered under their own names, and purchase new energy passenger cars with a single subsidy of no more than 15,000 yuan, and purchase fuel passenger cars with a single subsidy of no more than 13,000 yuan.

 

"In 2024, there is a certain comparison in the amount of subsidies set by local governments, which makes it possible to" spend little money to do big things "to stimulate consumption, but it has caused a certain amount of waste of funds." This year, the policy has set a subsidy ceiling at the central level, and it is clear that the funds will be tilted to the regions where the work will be better by 2024." Lang Xuehong said.

 

At the same time, the New Deal also made up for some policy loopholes last year, such as clear scrap renewal and old for new old car holding time requirements, scrapped vehicles must be registered in my name before the date of the "Notice" announcement (i.e. January 8, 2025); The transfer of passenger car registration in my name shall not be later than the date of the announcement of the Notice, and all localities may set the registration time requirements of old cars according to needs, allowing earlier than January 8, 2025.

 

Even more encouraging is the larger scale of financial support this year. At The State Council policy routine briefing held by the new Office on January 8, Zhao Chenxin, deputy director of the National Development and Reform Commission, made it clear that the total scale of ultra-long-term special Treasury bonds used to support the "two new" funds this year increased significantly over last year, and the specific amount of the total scale of funds will be announced during the two sessions of the National People's Congress this year.

 

The New Deal also continued the share ratio of central and local governments in 2024, making it clear that the funds directly allocated to local governments are generally shared by the central and local governments in accordance with the 9:1 principle, and the proportion of central governments in eastern, central and western regions is 85%, 90% and 95%, respectively, to reduce the pressure on local fiscal expenditure. The support of real money and silver will effectively give car consumers confidence.

 

 

02 Before the new subsidy is introduced, it may be more cost-effective to take the old subsidy

 

Li Gang, director of the Department of Market Operation and Consumption Promotion of the Ministry of Commerce, said that the Ministry of Commerce will work with relevant departments to introduce implementation rules for five fields such as automobiles as soon as possible, and clarify specific subsidy standards and operating processes. So this year's auto consumption climax, when will come?

 

Ubs issued a research report pointing out that the continuation of the policy reflects the central government's firm determination to stimulate the economy. The stimulus effect of vehicle replacement subsidies is expected to remain strong until the end of the year, but will be relatively slow at the beginning of the year. With some scrap renewal and replacement renewal needs already met at the end of last year, and other eligible consumers in no rush to implement their options, demand is likely to remain relatively slow, which could lead investors to become more pessimistic that even stimulus measures are no longer effective. Ubs expects the electric vehicle market to be particularly strong at the end of this year, mainly due to the likely increase in the electric vehicle purchase tax from 0% to 5% in 2026.

 

Lang Xuehong believes that the effect of the policy to stimulate car consumption will be immediate, and it can be released in advance before the Spring Festival.

 

She analyzed that the situation this year is quite different from last year. In April last year, the Action Plan to promote the exchange of old Consumer goods for new ones was released. In the same month, seven departments, including the Ministry of Commerce and the Ministry of Finance, jointly issued the Implementation Rules of the Automobile Trade-in Subsidy, which clarified the subsidy policy of the automobile trade-in fund. Last year's policy was introduced much later than this year, and then for a long period of time, due to local financial constraints, the subsidy program has been delayed, until August the state allocated ultra-long-term debt, and the subsidy policy has been introduced in succession, "the policy landing is full of less than 4 months, so the effect is mainly concentrated in the second half of the year."

 

Lang Xuehong pointed out that from last year's subsidy situation, the lower limit will not be less than 10,000 yuan, and the New Deal has set a ceiling of 13,000 and 15,000, so the intensity of subsidies will not vary much; After the introduction of the subsidy rules, it must be retroactive from January 1, 2025, so consumers who want to buy cars for the New Year have no need to wait. In addition, at present, some areas have issued news, before the introduction of the new subsidy rules still continue last year's subsidy intensity, if the local policy is clear more than 13,000/15,000, consumers as soon as possible to buy a car to enjoy more concessions.

 

 

03 Leverage increment will exceed 4.1 million units

 

Indeed, since the beginning of this year, many cities have announced cross-year cohesion policies. Guangdong Province, Beijing, Shenzhen, Fuzhou and other places have announced that subsidies will continue, and the relevant rules of various subsidy activities will continue to implement the 2024 policy standards before the introduction of the new subsidy program.

 

Yinchuan also launched a wave of subsidies for new car buyers in early January. For newly purchased fuel vehicles, subsidies of 1,000 yuan for vehicles worth less than 100,000 yuan, 2,000 yuan for subsidies of 100,000 yuan (including) to 200,000 yuan, and 3,000 yuan for subsidies of 200,000 yuan (including) to less than 300,000 yuan. For new purchases of new energy vehicles, the vehicle subsidy of less than 200,000 yuan is 2,000 yuan, and the vehicle subsidy of more than 200,000 yuan (including) is 5,000 yuan. Among them, a total of 800 subsidies for new fuel vehicles and 1,300 new energy vehicles will be purchased until they are completed.

 

In addition, in order to fully protect the subsidy needs of the people's consumer demand during the New Year's Day and the Spring Festival, according to Fu Jinling, director of the Economic Construction Department of the Ministry of Finance, recently, the central finance has pre-issued 81 billion yuan of funds for old consumer goods in 2025 to support the continuous implementation of policies across the country.

 

Under the new round of good news, the Zhongqi political Research Institute estimates that the number of passenger cars that meet the requirements of the scrap renewal policy in 2025 is about 25 million. With reference to the implementation effect of replacing old cars with new cars in 2024 (scrap renewal of more than 2.92 million, replacement renewal of more than 3.7 million), it is expected that the scrap renewal of cars in 2025 is expected to leverage an increase of 2 million to 2.5 million vehicles. Replacement and renewal is expected to leverage the increment of 2 million to 2.5 million vehicles, the overall increment of passenger vehicles is expected to leverage the increment of 4 million to 5 million vehicles, and commercial vehicles are expected to leverage the increment of 100,000 to 200,000 vehicles, and it is expected that the overall increment of old vehicles for new vehicles in 2025 will exceed 4.1 million vehicles, driving an increase in auto retail sales of more than 580 billion yuan.

 

It is worth mentioning that since the end of last year, support for the first purchase demand gradually rising, before and after the introduction of the New Deal, the first purchase users can be included in subsidies, has been a topic of great concern to consumers, but also one of the focus of hot discussion on the network. Lang Xuehong analysis, because the policy itself is "replacement update" covers "scrap update", the new purchase of cars has exceeded the concept scope, so a new round of old for new policy in 2025, does not exclude individual places with sufficient funds, will be subsidized for the first purchase of car users, but it is expected that the policy in most areas will not cover the new purchase of cars. However, the large group of new car buyers does need policy encouragement, so Lang Xuehong suggested supporting other policies.

 

Originally published by China Automotive News, January 13, 2025