AutoBeta(AutoBeta.net)05/31 Report--

On May 31, the Ministry of Finance and the State Administration of Taxation issued a "Announcement on the Reduction of Vehicle Purchase Tax on Some Passenger Cars", which pointed out that vehicle purchase tax shall be levied by half on passenger cars (9 seats and below) with a displacement of 2.0 liters and below whose purchase date is from June 1,2022 to December 31,2022 and whose single vehicle price (excluding VAT) does not exceed 300,000 yuan.

In response, Cui Dongshu, secretary-general of the Association, issued a document saying that by implementing the 60 billion automobile purchase tax halving measures, the policy guide for upgrading consumer consumption from the consumption end will promote the mainstream consumer groups to restore consumption confidence, and effectively reduce the purchase pressure of mainstream consumer groups, which will inevitably effectively pull the automobile consumption payment to the normal track. We expect an increase of 2 million units according to the effect of this policy. Aggravated by the impact of the epidemic situation, we estimate that the retail sales volume of the association in mid-May will be 19 million units in 2022, down 5% year-on-year. Through the implementation of many new policies such as purchase tax preference and 7 months of promotion fee efforts, the domestic retail sales volume of the whole year will reach 21 million units, and the expected increase of the policy will reach about 2 million units compared with that without the policy.

In addition, today a number of automobile enterprises also quickly launched a number of preferential benefits, such as Chery's Jietu Automobile announced that from now on, the purchase of all models under Jietu can enjoy full exemption from purchase tax, among which the above-mentioned policies reduce half of the purchase tax, Jietu Automobile subsidies half of the purchase tax; Jietu Automobile will provide another 5000 yuan subsidy for cars going to the countryside; Chang 'an Automobile launched the activity of "Chang' an Tax-free Car Purchase Festival", some models enjoy purchase tax exemption or maximum reduction of 120%(including the national reduction part), and the official will also provide financial consumption coupons for car purchase; Dongfeng Nissan NISSAN brand all models purchase tax exemption, limited time full insurance, etc.

Since March this year, the sudden outbreak of epidemic disease in the former country has led to the interruption of automobile parts supply chain, and many automobile enterprises have been forced to stop work or reduce production, resulting in pressure on the delivery of terminal market, and the whole automobile industry faces a big blow. Among them, the production of automobile parts manufacturers stagnated in April this year, and the overall automobile market suffered serious impact. According to the data of the Passenger Car Federation, the retail sales volume of passenger car market in April was 1.042 million vehicles, down 35.5% year-on-year and 34.0% month-on-month. The year-on-year and month-on-month growth rates of domestic passenger car retail sales in April were at the lowest level in the month. In view of the great impact on the production and sales of complete vehicles in the upper, middle and lower reaches of the automobile industry, the state and local governments began to help the automobile industry for six times.

In addition to the above-mentioned policies, the State Council also issued a Notice on Printing and Distributing a Package of Policies and Measures to Stabilize the Economy. In terms of automobiles, the Notice clearly pointed out that the policy of restricting the relocation of second-hand cars should be completely abolished: the immigration restrictions on small non-operating second-hand cars conforming to the national emission standards should be abolished nationwide, and the regulations on the registration, filing and registration of vehicle transactions of second-hand car market entities should be improved. At the same time, Xu Xiaolan, vice minister of the Ministry of Industry and Information Technology, said at a press conference today that the Ministry of Industry and Information Technology, jointly with relevant departments, issued a notice to officially launch a new round of activities for new energy vehicles going to the countryside, followed by activities such as home appliances and green building materials going to the countryside to further promote commodity consumption. However, at present, the official has not announced a specific policy for car activities in the countryside. From the past activities of cars going to the countryside and home appliances going to the countryside, subsidies should be given to qualified models in a certain price range, so that everyone can buy cars at a lower price.

In addition to the policy of reducing part of passenger car purchase tax introduced at the national level, new policies to promote automobile consumption have also been issued in many parts of the country. On May 29, the Shanghai City People's Government issued the Action Plan for Accelerating Economic Recovery and Revitalization of Shanghai City, in which the plan pointed out that automobile consumption should be vigorously promoted, 40,000 non-commercial bus license plates should be added within the year, and some passenger car purchase taxes should be reduced by stages according to the requirements of national policies. Before December 31,2022, individual consumers who scrap or transfer out passenger cars registered in Shanghai City and meet relevant standards and purchase pure electric vehicles will be given a financial subsidy of 10000 yuan per vehicle. In response to this policy, Cui Dongshu said: "Considering that Shanghai City lost about 100,000 passenger car sales from March to May this year, it is expected that there will be 50,000 new sales in the whole year after the implementation of this policy." If calculated according to the average of 200,000 yuan per vehicle, the output value of new cars in Shanghai City this year will reach 30 billion yuan. According to incomplete statistics, since the end of April, new policies to promote automobile consumption have been issued in many parts of the country, including Shandong Province, Guangdong Province, Hubei Province, Jiangxi Province, etc. Wu Wei, assistant professor of China Energy Policy Research Institute, pointed out that in recent years, due to the impact of epidemic situation, supply interruption and purchase restriction in some cities, the growth of automobile sales has stagnated. Recently, some cities have adopted stimulus policies such as increasing automobile indicators and providing subsidies for car purchase, which have positive significance for boosting the market. It is expected that the automobile market will resume growth in the second half of the year.

According to the concern of the automobile industry, similar measures mentioned above have been implemented in the automobile industry before, among which, the purchase tax reduction policy has been carried out for two rounds, and the inclusive "automobile to the countryside" policy has been carried out for one round, with remarkable effects. Data show that under the background of the global financial crisis in 2008, China first proposed the purchase tax reduction to 5% and the policy of automobile going to the countryside. Under the stimulation of the policy, the data showed that the domestic automobile output in 2008 was 9.3451 million vehicles, an increase of 5.21% year-on-year; sales volume was 9.3805 million vehicles, an increase of 6.70% year-on-year. In 2010, the policy of automobile going to the countryside continued to be implemented, and the purchase tax was raised from 5% to 7.5%. The policy was relatively tightened, but the domestic automobile production and sales increased by 32.44% and 32.37% respectively compared with the same period last year. In view of the slowdown in the growth rate of the automobile industry in 2015, the state launched the second round of automobile consumption stimulus policies in September 2015, including purchase tax reduction and old car scrapping subsidies. Stimulated by the policy, domestic automobile sales in the fourth quarter of 2015 increased by 15.84% year-on-year, and the annual sales volume was 24.5976 million units, up 4.68% year-on-year. In 2016, car sales exceeded 28 million units, up 13.7% year-on-year; in 2017, the purchase tax increased from 5% to 7.5%, and annual sales increased by 3% year-on-year to 28.88 million units.

Sun Shaojun, founder of the national automobile sales service platform "car fans", said that compared with the previous two purchase tax reduction policies, the most prominent feature of this round of policies is that the introduction speed is fast and the implementation cycle is short. The purchase tax reduction of 60 billion yuan can stimulate consumption confidence to a certain extent.

With the recent active introduction of car market stimulus policies, the car market has some signs of recovery, the latest data show that from the third week of May, the narrow passenger car market retail volume of 42,000 vehicles per day, down 6% year-on-year, month-on-month growth of 47%, May 1-22, the national passenger car market retail volume of 780,000 vehicles, down 16% year-on-year, but the decline narrowed by 22 percentage points compared with the previous month, month-on-month growth of 34%. The association predicts that retail sales of narrow passenger cars in China will increase by 26.4% from April to 1.320 million units in May, down 19.0% year-on-year.

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