news

After the Ministry of Commerce, the Ministry of Finance and other seven departments jointly issued the "Implementation Rules for the Subsidy of Auto Trade-in" (hereinafter referred to as the "Rules"), Beijing and other provinces and cities have successively issued relevant policies. In July this year, the National Development and Reform Commission and the Ministry of Finance issued the "Several Measures on Strengthening Support for Large-scale Equipment Renewal and Consumer Goods Trade-in", which increased the subsidy standard for scrapped cars and increased the maximum subsidy to 20,000 yuan. Under the "combination punch" of favorable policies, at the "Trade-in to 'revitalize' potential automobile consumption and move towards 'new'" themed salon jointly hosted by Beijing Business Daily and Deep Blue Media Think Tank recently, automobile industry associations, car companies, dealer groups, industry experts and others gathered to interpret how "trade-in" can stimulate the consumption potential of Beijing's stock car market.

“Trade-in” becomes a growth point

Talking about the domestic auto market in the first half of this year, Gu Yalei, an investor of Beijing Jieyatai Zhongxing Auto Sales Company, said frankly that "competition is very fierce". "After BYD took the lead in playing the low-price card in February this year, the price competition in the auto market has become more intense, which has a huge impact on mainstream joint venture brands." Gu Yalei said that although the rapid increase in new energy vehicles has brought challenges to the sales of traditional fuel vehicles, traditional fuel vehicles still have a certain market foundation. At the same time, various automakers are also accelerating the transformation to electrification to enhance their competitiveness.

Data shows that in April this year, the national passenger car market retailed 1.532 million vehicles, a year-on-year decrease of 5.7% and a month-on-month decrease of 9.4%. In order to further promote automobile consumption, on April 26 this year, the Ministry of Commerce and other seven departments issued the "Detailed Rules" proposing that from the date of issuance to December 31 this year, individual consumers who scrapped fuel passenger cars with emission standards of National III and below or new energy passenger cars registered before April 30, 2018, and purchased new passenger cars that meet energy-saving requirements will receive a one-time subsidy of 7,000 yuan to 10,000 yuan. According to statistics, as of 12:00 on June 25 this year, the Ministry of Commerce's automobile trade-in information platform has received 113,000 applications for automobile scrapping and renewal subsidies. At the same time, data released by the Beijing Development and Reform Commission showed that as of June this year, about 2,700 automobile trade-in applications had been received, with an estimated subsidy amount of 23.26 million yuan, which has cumulatively boosted consumption by 730 million yuan. Data from the Passenger Car Market Information Joint Branch of the China Automobile Dealers Association (hereinafter referred to as the "Passenger Car Market Information Joint Branch") showed that the national passenger car market retailed 1.71 million vehicles in May this year, a month-on-month increase of 11.4%.

Under favorable policies, car companies' sales have also continued to grow. Data shows that Tesla's sales in May this year increased by nearly 77% month-on-month. Lv Yanan, Tesla's Beijing regional sales manager, said that the "old for new" policy, Beijing's issuance of new energy passenger car quotas, and Tesla's 5-year 0 interest policy have further boosted Tesla's sales performance.

In July this year, the subsidy for "trading in old cars for new ones" was further increased. According to the information released on the official website of the National Development and Reform Commission, the National Development and Reform Commission and the Ministry of Finance issued the "Several Measures on Strengthening Support for Large-Scale Equipment Renewal and Trade-in of Consumer Goods", which increased the subsidy standard for scrapped cars to a maximum of 20,000 yuan. CITIC Securities Research Report believes that the new version of the car trade-in policy is strong and exceeds market expectations, and the stimulus to the automobile industry will be much higher than the policy standard at the end of April. Cai Haiyuan, vice president of the Beijing Automobile Circulation Industry Association, said that after the subsidy for "trading in old cars for new cars" is increased, all consumers who apply for "trading in old cars for new cars" will receive subsidies in accordance with the new regulations. "Even consumers who have applied for subsidies before will receive subsidies in accordance with the new policy." He said.

Cai Haiyuan said that with the national "old for new" policy, this year's auto sales performance will be better than last year. In recent years, Beijing has provided subsidies for the replacement of old cars with new energy vehicles. This year, the "old for new" policy is more strictly implemented. With the increase in subsidy amounts, Beijing's new car sales will further increase this year. Lv Yanan believes that "old for new" will become a growth point and explosion point for Beijing's new car market.

Taking advantage of the low price

As a market for automobile stock consumption, Beijing can leverage the policy "combination punch". Cai Haiyuan believes that dealers can further promote sales by taking advantage of the price "lowland" advantage of the Beijing auto market. "According to this year's 'trade-in' policy, consumers can apply for subsidies in the local area wherever they buy a car and issue an invoice." Cai Haiyuan said that the Beijing market has always been in a price "lowland" in the national auto market, so it will also attract consumers from surrounding provinces and cities to buy cars in Beijing. At the same time, according to this "trade-in" policy, consumers scrap old cars and buy new cars, and apply for local subsidies based on the invoice of the place where the new car was purchased. "Subsidies are superimposed on the terminal price advantage. From the consultation calls received by the association, it is found that many consumers in Hebei, Inner Mongolia and other places are interested in buying cars in Beijing." Cai Haiyuan said that under the dual factors of subsidy convenience and price "lowland", it is expected that the Beijing new car market will have a good transaction performance.

At the same time, Gu Yalei said that compared with other provinces and cities, the Beijing market has an advantage in car sources, and the competition among dealers is more intense, thus forming a regional price "lowland", which does attract some consumers from other provinces and cities to buy cars in Beijing. In fact, the price "lowland" effect has also become an incremental breakthrough for some dealers. Gu Yalei said that in the stock market, it will have a certain impact on the dealers' new car sales. At the same time, in recent years, with the price of luxury brands dropping and the competition for new energy vehicles heating up, the competition for sales in the stock market has become more intense, and how to expand sales has become one of the issues that Beijing auto dealers need to consider. "At present, more than half of the new cars in the store are sold to other provinces and cities, mainly relying on the provinces and cities around Beijing, such as Hebei, Inner Mongolia and Shaanxi." Gu Yalei said as an example.

Previously, automakers had restrictions on regional sales of new cars, on the one hand to protect the interests of dealers in each region, and on the other hand to prevent vicious competition in the market. However, as the domestic auto market enters a period of adjustment, some automakers no longer impose mandatory restrictions on cross-regional sales. However, for BYD, whose overall sales continue to be high, Jia Chunyan, chairman of Rundi Group, revealed that due to the large size and sales of BYD stores under the group, in order to protect the interests of other dealers, cross-regional sales are still not allowed and sales can only be carried out within the Beijing area. "Since the beginning of this year, the store has sold more than 8,000 new cars." He said.

The fourth quarter of the auto market is expected to increase

According to data released by the China Passenger Car Association, in the first five months of this year, Beijing had a total of 253,700 new car transactions, a year-on-year increase of 10.11%, 1.81 percentage points higher than the national average. Among them, Beijing had 56,500 new car transactions in May this year, up 2.59% from the previous month, 0.09 percentage points higher than the national average. From the data, after the "old for new" policy was implemented at the end of April this year, new car transactions in the Beijing market have gradually heated up.

However, since the policy will be extended to December 31 this year, and the subsidy application period will end on January 10 next year, the peak season for "trade-in" car replacement is expected to appear in the fourth quarter of this year. "The subsidy amount for 'trade-in' increased in July this year, further opening up the incremental space for new cars." Gu Yalei said, but judging from the current data, there is still a lot of room for the release of "trade-in" car purchase demand, and there should be a blowout growth in the fourth quarter of this year. In order to seize the incremental opportunity, car companies and dealers have also taken action in advance. Jia Chunyan said: "The period from September to November this year is a critical period for replacement for hybrid and new energy vehicles, so the company has also stepped up its publicity efforts."

Tesla, which adopts a direct sales model, immediately started policy training after the "trade-in" policy was released. "After the policy was released in April and July this year, Tesla's direct stores nationwide all carried out special training. More professional vehicle service personnel are equipped in the delivery process. Once the old car scrapping process is involved, the vehicle service personnel and replacement service providers will assist Tesla consumers in solving the problems they encounter." Lu Yanan said that the starting price of Tesla models at 239,900 yuan may be slightly higher than other brands, but Tesla has also launched a 5-year 0% interest policy to further lower the threshold for consumers to buy cars and give consumers more choices.

"Based on the current policies, we will also formulate corresponding strategies. Whether it is replacement service or 5-year 0 interest, Tesla uses a variety of strategies to lower the threshold for users to buy cars and further stimulate auto consumption." Lv Yanan said. In Cai Haiyuan's view, with the support of policies such as "trade-in", the Beijing auto market still has enough room for development, so both automakers and dealers must have firm confidence.

Beijing Business Daily reporter Liu Xiaomeng