Restriction, Deregulation, Tax Relief, Car Subsidy: How To Save The Car Market Under The Epidemic?

On March 5th, Wang Bin, deputy director of the marketing operation Department of the Ministry of Commerce, said at a regular press conference that the recent consumer market operation in the whole country has seen positive changes, and the market sales have bottomed up.

In late February, the average daily sales of 1000 retail businesses monitored by the Ministry of Commerce increased by 5.6% over the middle of February. Among them, the rebound in automobile demand grew more obviously, with an increase of 14.8%.

Despite the gradual containment of the epidemic and the further restoration of production and living order, market sales are rising steadily. However, the first quarter car sales decline is a foregone conclusion.

According to the latest statistics released by the Federation of Hong Kong in March 9th, in February, the retail market of passenger cars in China dropped by 78.5% compared to the same period last year, only 252 thousand. In 1-2 months, the total retail sales fell 41% in the same period last year, becoming the biggest decline in China's automobile market in the past 20 years.

Although most of the car dealers and distributors began to resume production in mid February, they took many measures to deal with them. But so far, the impact of the epidemic on production, supply, terminal retail and consumer demand is still immeasurable.

According to the sales figures released by some car companies in February, there were only 134 cars sold in the hippocampus, and 47365 in SAIC, down 86.95% compared with the same period last year. Honda fell 85% in China compared with the same period last year, TOYOTA fell 70% in China compared with the same period last year, Mazda fell 78.95% in China compared with the same period last year, BYD fell 79.5% compared to the same period last year, and Beijin Blue Valley fell 65.05% percent.

The serious impact of the epidemic on China's automobile market has become an indisputable fact. The downside of the car market will bring huge losses to the national economy.

According to the calculation, China's automobile industry has more than 1 trillion yuan of tax revenue, accounting for 10% of the total tax revenue of the country, and more than 40 million employees in automobile and direct related industries, accounting for 10% of the total number of employed persons in cities and towns nationwide. The consumption of automobile products exceeds 2 trillion yuan, accounting for 10% of the total sales of consumer goods in China.

If the 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 drag 0.2% of the social zero to 0.1% of the economic growth.

Guo Jin Securities pointed out in the research report that, due to the high contribution of automobile consumption to economic growth, greater impact on policies and the existence of market space, the automobile consumption stimulus policy under the epidemic situation will exceed expectations.

At this moment, is the "rescue market" a national consensus? Should we cancel the purchase restriction policy of the restricted cities? Drawing on past experience of excessive stimulus, how to "save the market"? Has become a hot topic in the industry.

The impact of sudden outbreaks on the automotive industry is obvious to all. Under the dual effects of cyclical fall and epidemic, the depth, breadth and time of the impact on the industry can be foreseen. The automobile industry has a high technology content and a large spread effect, which has a strong effect on economic growth. As soon as possible, the recovery of the automobile industry will have a historic positive effect on the steady employment and the recovery of our country and even the global economy.

In March 5th, Zuo Yanan, former chairman of Jianghuai Automobile, said in an interview with the economic report reporters in twenty-first Century, "in the structural surplus of production capacity, the implementation of appropriate policies and measures will not cause new car boom and capacity expansion. Appropriate measures can turn danger into opportunity, optimize industrial structure and promote industrial transformation and upgrading."

Stimulating domestic demand and supporting industries simultaneously

Despite the industry's expectation that consumer demand for cars will be released after the outbreak, the auto market will usher in a wave of car buying. However, J.D. Power released a report on the impact of the new crown pneumonia epidemic on consumers' willingness to buy cars in March 6th. It pointed out that some consumers' enthusiasm for buying cars was stimulated to a certain extent by the epidemic, but most consumers were still relatively rational about buying cars.

"The auto industry pays more attention to government support policies and subsidies and tax reduction consumption policies, but first of all, we should pay close attention to the potential consumer's purchasing power (income expectation)." Senior automotive analyst Zhong Shi pointed out that the outbreak of the epidemic, resulting in damage to enterprises, reduced employee income, reduced willingness to buy cars, and the downward trend of car market, we should first consider which link to save the market first.

"At present, the various links of the automotive industry chain are generally facing great difficulties, not only from the country, but also from the threat of parts and components from serious countries such as Japan and South Korea," and so on. Industry experts told reporters on twenty-first Century economic report.

In fact, the impact of this epidemic has spread all over the world. In February 26th, Moodie, the world's leading credit rating agency, lowered Investors Service Inc's outlook for global car sales in 2020, saying that global auto sales will drop by 2.5%, down from 4.6% in 2019, but "worse than the 0.9% we predicted earlier this year."

Moodie believes that due to the impact of the epidemic, China's largest automobile market in the world will be hit hard. It expects China's auto sales to drop by 2.9% in 2020, rather than the previous forecast of 1% growth. In Hubei, where the epidemic is most severe, about 2 million 200 thousand production capacity has been suspended, and 1300 parts enterprises have been seriously affected.

"A few of the vehicle manufacturers have informed us that they will not be manufactured until May, and that if they return to work, they will not resume production. This effect affects the whole industry chain, which in turn will drag down the whole macro-economy. Domestic demand is no longer needed, and external demand is spreading to the world as the epidemic spreads. A multinational auto parts business executives believe that the time has come to rescue the market.

"From the demand side, the impact of the epidemic will be long and the damage to the two or three industry and the impact on national income can not be underestimated. This will directly affect purchasing power, and positive policies and measures can reduce the cost of car purchase and enhance the purchasing power to a certain extent." Zuo Yanan pointed out.

Thus, from central to local to enterprises, a nationwide rescue operation is spreading.

In February 16th, the speech delivered by "seeking truth" magazine at the Standing Committee meeting of the Standing Committee of the Political Bureau of the Central Committee of the CPC to deal with the epidemic situation of new coronavirus pneumonia pointed out that we should actively stabilize the traditional bulk consumption of cars and encourage the auto purchase area to appropriately increase the number of vehicle license plates, so as to promote the consumption of automobiles and related products.

In February 20th, the Ministry of Commerce pointed out that all localities should be encouraged to introduce new measures to promote consumption of new energy vehicles, increase the quota of traditional automobiles and replace old cars with other measures according to local conditions.

In February 3rd, Foshan launched the first policy to encourage car consumption and gave different subsidies to different types of vehicles. In March 3rd, Guangzhou announced that it would implement 100 thousand new vehicle quota levels and restart local subsidies for new energy vehicles. In March 4th, Hunan announced that it would carry out an action to promote car consumption.

In response to the policy call, car companies began to save themselves. Guang Qi Chuan Qi, GAC new energy, GAC Honda, Haff, SAIC GM Wuling, Chery automobile, Changan automobile and so on also provide different car buying policies and preferential policies for the corresponding products.

Of course, in addition to the stimulus policies of the consumer side, some experts believe that it is time for the relevant government departments and banks to take the initiative to investigate and investigate the industry, inject capital and policies at the key point, and support the development of enterprises.

In order to save the market, we should first relax the consumption policy, and then give low interest loans to the enterprises in difficulty, so that the whole industry chain can be driven by consumption. In March 8th, Wang Binggang, group leader of the national new energy automotive innovation project group, said in an interview with reporters that the efforts of the enterprises themselves are the basic conditions for their survival. The enterprises that are not working hard and not competitive can not withstand the test and withdraw from the market and tide over the waves.

"There is no need for the government to save the market." The emphasis is on temporary and difficult enterprises that are basically in good condition and in line with the needs of national development. Wang Binggang believes that enterprises should be divided into three categories. First, there will be no problem as long as the market is restored to normal. There are certain difficulties in the second category. If necessary support is needed, we will soon tide over the difficulties, and the third type of enterprises that are usually operating poorly.

"Opening up the market is beneficial to all enterprises. First class enterprises immediately benefit and seize the opportunity. The focus of rescue should be second kinds of enterprises.

Left Yanan suggested that the subsidy policy for car enterprises should be implemented to protect the reasonable demand of vehicle enterprises and reduce the cost of capital and electricity. The most preferential tax rate and other incentive policies should be implemented for merger and reorganization of enterprises and mixed ownership reform. It is suggested that the relevant ministries and commissions should make a preliminary plan, and then organize relevant experts and vehicle enterprises representatives to verify the feasibility, effectiveness and scientificity of the policy measures.

Restriction is relaxed and avoided.

From the past, we have implemented the policy of reducing the purchase tax, car going to the countryside, replacing the old car with the old car, subsidized by the energy-saving vehicle, and so on. The effect of the open restriction, car purchase subsidy and tax relief is more obvious for the automobile to stimulate domestic demand.

In March 6th, the Great Wall automobile, through visiting the famous car companies in China, issued the "breaking policy restrictions and stabilizing automobile consumption" - some suggestions on China's auto industry stimulus policy, also called on relevant departments of the state to implement as soon as possible policies including the release of the restricted purchase policy, encourage cars to go to the countryside, and delay the six handover.

Among them, in order to stimulate the consumption demand of automobiles, the restriction on the purchase of cities should be relaxed, and the proposal to cancel the policy of restricting the purchase of automobiles should be put first.

"Car purchase restriction relieves urban traffic pressure to a certain extent, but at the same time restraining the release of market demand. It is suggested that Beijing, Shanghai, Tianjin and other places should appropriately relax the quota of purchase quota. Meanwhile, local governments should guide private cars through the comprehensive scheme of suburban management in urban and suburban areas, proper restrictions on congested roads, etc., and reduce the intensity of car use and realize the balanced development of automobile industry and urban traffic through detailed management and construction of urban intelligent transportation network. The Great Wall pointed out in the proposal.

Up to now, there are eight automobile restricted cities in China: Shanghai, Beijing, Guangzhou, Tianjin, Hangzhou, Shenzhen, Shijiazhuang and Hainan.

Huaxi Securities expects that, at present, there are over 8 million accumulated demand in the whole country, and if it is gradually digested in 5 years, it is expected to contribute about 1 million 600 thousand vehicles to the market every year, and the contribution to the growth of the automobile industry will be about 6%. If the restriction policy is gradually liberalized and the real demand is reflected, the automobile market will usher in a larger development space.

Xu Xiangyang, a professor at Beihang University, believes that the most powerful and immediate policy to drive car consumption is to completely eliminate the restriction. "Restriction on urban car consumption is just needed, and it is sufficient demand for purchasing power."

Insiders also told reporters in the twenty-first Century economic report that for cities such as Beijing and Shanghai, if the problem of traffic congestion is not solved, the increase in the quota of licences is also very difficult.

"Restricting the purchase of vehicles is not a permanent solution to traffic problems." Aforementioned industry experts said, "international experience shows that to control traffic congestion, we need to adopt a policy package, including vigorously developing rail transit, optimizing urban structure, improving traffic management level and strengthening infrastructure construction, implementing policies to encourage consumption and guiding consumption, and implementing regional vehicle restrictions (such as setting up low emission areas)."

Reporters combing found that since 2019, in order to stabilize car consumption, the relevant ministries and commissions have repeatedly mentioned in the policy to relax the restriction on the purchase of automobiles.

In January 2019, the 10 ministries and commissions of the national development and Reform Commission and the Ministry of transport jointly issued the implementation plan of further optimizing supply and promoting steady growth of consumption to form a strong domestic market (2019), and put forward "optimizing management measures for motor vehicle purchase restriction" to promote automobile consumption.

In June 2019, the national development and Reform Commission issued the "implementation plan for promoting the upgrading and upgrading of key consumer products and smooth recycling of resources" (2019-2020 years). It was proposed that the local governments that have implemented the auto purchase restriction should speed up the shift from restricted purchase to guidance and use, and all localities should not restrict or restrict the purchase of new energy vehicles, which should be abolished.

In November 2019, a spokesman for the national development and Reform Commission disclosed at a news conference that we should stabilize the bulk of car consumption and study the policy of eliminating restrictions on consumption. We should stabilize the consumption of cars and other consumers, eliminate the restrictions on vehicle consumption, and explore specific measures to gradually relax or cancel the purchase restriction, so as to promote the policy of car purchase restriction to change the guiding use policy.

Now, from top to bottom, we are talking about releasing the restriction. Simple "one size fits all" release restriction is unrealistic. However, increasing the quota of car purchase quota in the restricted cities is relatively objective and easy to achieve. Director of the China Automotive Industry Advisory Committee and former director of Changan Automotive Group, told reporters.

In this regard, an Qing Heng recommended that the purchase of cars can be gradually relaxed from six aspects.

First, all quota quotas of the restricted cities should be limited and released as soon as possible.

Second, we should liberate new energy vehicles.

Third, we must let go of the policy of limiting the purchase of urban suburban counties. The suburbs, especially in the suburbs of Beijing, will not aggravate the congestion in the suburbs, and solve the problem of buying cars by consumers in the suburbs. It only increases the workload of government management and is not difficult to solve.

Fourth, let go of the sales of Chinese brand cars suitable for epidemic prevention.

Fifth, the difficulty of vehicle sales is closely related to the six new standards of the implementation country, and the restriction of six vehicles should be relaxed.

Sixth, the restrictions on the move and purchase of second-hand cars should also be liberalized.

An Qingheng said: "policy requirements are too high, the practical significance is limited, enterprises are difficult to deal with, and ultimately affect product sales."

Therefore, the impact of vehicle emissions on air quality should be carefully reassessed. That is, the speed of implementation of new emission standards needs to be studied. The time limit for transitional implementation of specific national six should be pushed back to ensure that five vehicles in the stock market have enough time to sell digestion.

"Foshan, Guangzhou and other cities have already stepped out of the important step in releasing the restriction, and releasing the restriction, Beijing has the significance of wind vane. If the Beijing suburbs can be released, it will solve a lot of problems and need to speed up the operation." An Qingheng finally said.

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