AutoBeta(AutoBeta.net)03/12 Report--

China's auto industry suffered a sharp setback in 2020, with passenger car sales reaching 250000 in February, down 78.7% from January to February, down 41% from January to February, a record low, mainly affected by sudden viral pneumonia. Most dealers' retail sales in the first three weeks of February were basically zero. Therefore, according to the comprehensive analysis of the Federation, sales for the whole year are expected to decline by 8%.

However, in March, China's automobile retail has recovered somewhat, but it is still "halved" compared with the same period last year. Overall sales recovered significantly in the first week of March (1-8), with average daily retail sales of 16325 vehicles, down 51 per cent from a year earlier, according to the Federation of passengers.

The association believes that retail sales fell 61% in the last week of February from a year earlier, and retail sales improved significantly month-on-month at the beginning of March. The main influencing factor of the passenger car market in the near future is the speed of retail recovery after the epidemic, depending on the situation of people entering the store.

Since March, the production of major car companies has entered a normal state, but the test for dealers is even greater. In February, the comprehensive inventory coefficient of car dealers reached 14.8, up six times year-on-year and eight times month-on-month, to an all-time high. The follow-up terminal retail recovery is slow, the inventory pressure is great, and the capital cost increases under the sharp decline of income, which is a severe test for dealers.

The association predicts that according to the normal judgment of lifting the epidemic at the end of April, the car market is depressed in February and exceeds expectations. The car market will pick up slowly from March to April, and it is expected to return to normal after May. Without strong stimulus policies at the national level, the negative growth of the car market is likely to increase further in 2020, with retail sales forecast to decline by 8% year-on-year in 2020.

In order to boost the confidence of the automobile industry, the China Automobile Association recommends that relevant departments introduce new policies on automobile sales as soon as possible to stimulate consumption potential.

These include the appropriate increase of license plates in restricted areas; for example, Beijing's license limit quota should be appropriately increased, which is of great significance to stabilize automobile consumption in 2020.

We will adjust the purchase tax rate on cars with small emissions (less than 1.6L) and introduce a policy of going to the countryside to promote consumption.

In addition, there are lifting restrictions on the purchase of new energy vehicles, optimizing and extending the new energy subsidy policy, including individual car purchase expenses in the special additional deduction of individual income tax, implementing the "State III" emission vehicle purchase tax reduction and reduction, increasing auto financial support, raising the value-added tax rebate rate for vehicle exports, promoting vehicle export, and promoting the circulation and consumption of used cars.

In mid-February, the Ministry of Commerce made it clear that it would study and introduce policies and measures to further stabilize automobile consumption to reduce the impact of the epidemic on automobile consumption, and at the same time encourage all localities to introduce measures to promote new energy vehicle consumption, increase traditional car purchase restrictions, and carry out car trade-in measures to promote automobile consumption. However, the specific implementation and effect have yet to be verified.

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