AutoBeta(AutoBeta.net)03/22 Report--

Car sales fell 79.1% in February from a year earlier, so far, China's auto market has fallen for 20 consecutive months compared with the same period last year. Under the continuing influence of the epidemic, the recovery pace of the automobile industry has been disrupted, and there is still a lot of uncertainty about when to return to proportional growth. According to the latest forecast of the China Association of Automobile Manufacturers, if the epidemic is effectively controlled by the end of March, production and sales are expected to decline by about 45% in the first quarter and about 25% in the first half of the year.

Sales in China's auto market fell for the first time in 28 years in 2018, and the decline widened to 8.2% in 2019. In 2020, China's auto industry suffered a severe setback, and the car market environment remained depressed. The sudden COVID-19 epidemic brought the auto industry to a standstill.

Ye Shengji, deputy secretary general of the China Automobile Association, said that the epidemic has made the automobile industry worse, the downward pressure on the automobile industry is unprecedented, and problems such as insufficient demand in the automobile market and stagnant consumption still exist, seriously affecting the further recovery of enterprise production.

The epidemic will have a huge impact on the operation of the automobile industry in the first quarter. Ye Shengji said that if the epidemic is effectively controlled by the end of March, production and sales are expected to decline by about 45% in the first quarter and about 25% in the first half of the year.

Ye Shengji believes that after the end of the epidemic, suppressed consumer demand will be released in the short term, and the automobile market will usher in a brief consumption peak, but affected by the decline in the income of some residents, especially in low-and middle-income groups, the development situation of the automobile market for the whole year is still not optimistic.

According to data released by the China Federation of passengers, the car market has fallen by nearly 50 per cent since March, with retail sales averaging 19014 units a day in the first half of the month (1-15), down 47 per cent from a year earlier.

The association believes that the explosion of automobile consumer demand in March is not prominent, and the current week-by-week sales performance is still stable compared with the same period last year. Although the government plans to introduce policies to stimulate the car market, the actual landing is not expected to take effect until April, and the effect of the policy start-up period is generally not very prominent, until the last bus effect before the withdrawal of the policy is obvious. Some cities have encouraged a return to normal order, but consumer confidence in car purchases will be difficult to return to normal by the end of March, and it will be difficult for car demand to erupt strongly in the short term.

In order to boost the confidence of the automobile industry, stabilize the development of the automobile industry and promote automobile consumption, the China Automobile Association suggests that relevant departments introduce policies to stimulate consumption potential as soon as possible. Specific measures may include appropriately increasing car license plate quotas in restricted areas, including individual car purchase expenses in special additional deductions for individual income tax, adjusting the purchase tax rate for passenger cars with small emissions (below 1.6L), and strengthening incentive policies for automobile markets in fourth-and fifth-tier cities and townships., continue to vigorously develop the new energy vehicle industry and continue the new energy subsidy policy.

Stabilizing traditional bulk consumption such as cars is of great significance to the recovery of the economy, and it is urgent for policies to save the market.

On March 20, the Guangzhou Municipal Government adopted a number of measures to promote automobile production and consumption in Guangzhou. In order to stabilize the automobile industry, Guangzhou will, from the three aspects of boosting the consumption of new energy vehicles, encouraging the accelerated upgrading of vehicles, and creating an automobile consumption environment, put forward measures such as car purchase subsidies, competitive incentives, new parade taxi indicators, and optimizing the regulation and control policies for small and medium-sized bus indicators, to support the sustained and healthy development of the automobile industry, and the total output value is expected to exceed 20 billion yuan.

Not long ago, Guangzhou has clearly accelerated the work of the quota of 100000 new small and medium-sized buses in June 2019, and studied and launched the new index according to the situation. At the same time, by the end of 2020, individual consumers will be given a comprehensive subsidy of 10,000 yuan per vehicle for the purchase of new energy vehicles, and 3000 yuan for those who replace or scrap used cars.

Guangzhou has implemented new measures to boost car consumption, which may be followed by other cities in the future.

In mid-March, 23 departments, including the National Development and Reform Commission, the Ministry of Public Security and the Ministry of Finance, jointly issued the "implementation opinions on promoting consumption expansion, improvement and quality to accelerate the formation of a strong domestic market." it is necessary to "promote the shift from car purchase restrictions to guided use policies, and encourage car license plate limits to be appropriately increased in areas where car purchases are restricted."

China's auto market is likely to decline in the third year in 2020, and policy rescue plays a key role in industry confidence. The association believes that policies such as relaxing purchase restrictions and halving car purchase tax are good policies to boost first-purchase consumption.

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