Guangzhou Restart Local Subsidies For New Energy Vehicles To Stimulate Vehicle Consumption Signals

Rapid action, since last week in the relevant documents to boost the car consumption policy, Guangzhou quickly released the specific measures to stimulate car consumption.

In March 3rd, "Guangzhou resolutely won the new crown pneumonia epidemic prevention and control struggle to achieve annual economic and social development goals and tasks of a number of measures" (hereinafter referred to as the "48") officially released, the document contains 48 measures, intended to promote the economic and social development from various aspects, such as supply of materials, recovery of enterprises, production of key projects, and so on.

In view of automobile consumption, the "48 items" put forward, will implement 100 thousand new vehicle quota quota work, at the same time, for the new energy vehicle, second-hand vehicle replacement "country six" new car and so on give the highest 10 thousand yuan comprehensive subsidy.

Guangzhou has become a local government that explicitly issued the stimulus policy of automobile consumption after Foshan. Prior to February 17th, Foshan issued a document that the city's purchase of "state six" standard displacement vehicles to grant financial subsidies, the subsidy standard is 2000-5000 yuan for bicycles.

Stabilizing automobile consumption has become the main demand of the automobile industry at present.

Since the Spring Festival, there have been many discussions about the stimulation policy of automobile consumption. Recently, the Ministry of Commerce and other ministries and commissions have stated that measures to further stabilize automobile consumption will be introduced, and the industry associations such as the China Automobile Industry Association also put forward some targeted measures and measures such as "postponing the implementation of the national six".

In March 2nd, state securities issued a research report that the current epidemic will cause greater drag on the car market, but as the epidemic is controlled, to hedge against the economic downturn, the government's policy direction to stimulate car consumption is also more clear.

New energy vehicles or preferential benefits

Twentieth of Guangzhou's "48 articles" refers to three aspects of automobile consumption stimulating policies.

First, speed up the implementation of the 100 thousand newly added quota of small and medium buses in June 2019, and launch new indicators according to the situation. Second, from March 2020 to the end of December, in accordance with the principle of encouraging advanced technology and safety and reliability, we will provide comprehensive subsidies to 10 thousand yuan per vehicle for the purchase of new energy vehicles by individual consumers. Consumers who change or scrap used cars purchase the "country six" standard new car registered in Guangzhou, with a subsidy of 3000 yuan per vehicle.

Guangzhou's automobile consumption stimulus policy or new energy vehicle priority benefits. On the one hand, Guangzhou resumed the previously subsidised local subsidy policy for new energy vehicles. On the other hand, the new quota for small and medium buses was also targeted at "energy efficient vehicles".

In March last year, the subsidy policy for new energy vehicles was released in 2019, and local subsidies were formally abolished. Since then, in September, the office of the leading group of new energy vehicle development in Guangzhou issued a new subsidy standard. After the transition period is clear, subsidies for pure electricity and plug-in hybrid cars will not be given.

It needs to be pointed out that the automobile subsidies introduced by Guangzhou are different from the previous local subsidies for new energy vehicles. An auto industry analyst told reporters in twenty-first Century economic report that the patch was specifically aimed at new energy vehicles, and the subsidy is universal. It includes both new energy vehicles and traditional fuel vehicles, but the subsidy level of the two is different.

In addition, the subsidy is strictly linked to the national subsidy. The subsidy policy stipulates that the subsidy standard can not be 50% higher than that of the national supplement. The amount of subsidies for new energy vehicles in Guangzhou is formulated by the local governments themselves.

And the new medium and small passenger cars are all "energy-saving vehicles".

In 2019, the incremental allocation index of small and medium-sized passenger cars in Guangzhou was originally 120 thousand, of which the proportion of ordinary and energy-saving vehicles was 9:1, and the index of energy-saving vehicles was 12 thousand. But in June, in order to promote vehicle consumption, Guangzhou added 100 thousand new energy saving vehicle indicators to two years.

New energy vehicle is an important incision to boost car consumption. In the past few years, new energy vehicles have been growing rapidly under the support of the subsidy policy, which has become a new kinetic energy in the overall automobile market with slowing growth or negative growth. Only last year, the sales growth of new energy vehicles was positively negative because of the steep decline in subsidies.

Boost car consumption

However, the overall proportion of new energy vehicles in the new car sales is still relatively low. China's automobile market is still largely supported by fuel vehicles, so the "rescue market" is not just around the new energy vehicles.

Guangzhou also provides a subsidy of 3000 yuan to consumers who buy second-hand cars for "state six" emission standards. Previously, the policy of Foshan was mainly targeted at "country six" models, such as the purchase of new cars and the subsidy of 2000 yuan for bicycles, such as upgrading, and 3000 yuan subsidy for bicycles.

More local governments are brewing policies to stimulate car consumption. In addition to Guangzhou and Foshan, Shenzhen also proposed in related documents that we should stabilize the consumption of cars and other bulk consumption, speed up the number of new car indicators, and give priority to protecting the family's first purchase demand.

Trade associations have also come forward to protect the current development of the automotive industry. The earliest is the China Automobile Association, which submitted to the relevant departments the proposal to postpone the implementation of the "national six" emission standard nationwide. Recently, the National Association of automobile dealers and dealers also submitted relevant reports to the Ministry of Commerce and the development and Reform Commission, and put forward five suggestions.

The recommendations of the dealer's chamber of commerce are more focused on the circulation level, including increasing financial support for automobile distribution enterprises, coordinating vehicle enterprises to accelerate the return of dealers' rebates, etc., but it also advocates that policies and measures to stabilize automobile consumption should be issued as soon as possible, such as implementing preferential tax incentives for car purchases, restarting cars to the countryside, and slowing down the subsidies for new energy vehicles. Quotient chamber of commerce also called for the delayed implementation of the "state six" vehicle standard.

The "state six" emission standard has been implemented since last year. This year's progress mainly includes two aspects: first, the popularization of "six A" in the whole country; two, some cities should implement the "state six B" according to the plan. "State six A" is equivalent to "Europe six", while "country six B" is more severe than "Europe six". At present, only a few cities like Shanghai have switched to "six B" directly.

Postponing the implementation of "six" emission standards has been widely recognized in the industry. On March 3rd, President Qian Huikang of General Motors China said at the online meeting that he hoped the government would postpone the implementation time of "national six", especially the "six B" standard.

"Under the current market situation," six B "before inventory digestion has considerable challenges. Some of our cars need to be transformed into "country six B", but some of them have not yet returned to work. Delayed execution will help the whole industry. " Qian Huikang said.

State securities research report pointed out that, due to the high contribution of car consumption to economic growth, greater impact on policy, and the existence of market space and other factors, the automobile consumption stimulus policy under the epidemic situation will exceed expectations.

According to estimates, if the volume of car sales fell by 50% in the first quarter of this year, it would drag 1.7% of the total retail sales to 0.9% of the total economic growth. If the annual sales volume dropped by 7%, it would cause 0.2% of the social drag and a 0.1% impact on economic growth.

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