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With the arrival of more local subsidy policies, the scale of the car trade-in policy will be larger, the effect will be better, and the impact will be deeper.

Author: Li Sijia

Editor: Cao Jiadong

Editor: He Zengrong

"The subsidy in Hangzhou is only 12,000 yuan, so why don't I choose the 20,000 yuan government subsidy?"

"Is it the 20,000 yuan I lack? What I lack is the Beijing license plate!"

......

In recent days, discussions on the subsidy policy for car trade-in have continued online.

The cause was the "Notice on Further Improving the Work of Auto Trade-in" (hereinafter referred to as the "Notice") issued by the Ministry of Commerce and seven other departments in August. According to the "Notice", for individual consumers who meet the requirements of the "Auto Trade-in Subsidy Implementation Rules" and scrap their old cars and buy new cars, the subsidy standard will be increased to: 20,000 yuan for the purchase of new energy passenger cars and 15,000 yuan for the purchase of fuel passenger cars.

Against the backdrop of a large subsidy policy, new trade-in programs have been launched in recent days in a number of places, including Beijing, Hangzhou, Chengdu, Hainan, Qinghai... From increasing the subsidy amount to lowering the subsidy threshold, and then to directly providing subsidies to consumers, they are simply using all kinds of tricks to increase the old-for-new policy in order to stimulate automobile consumption and increase the effectiveness of the policy.

Based on the fact that various places have increased the subsidy standards for old car replacements, netizens have also expressed their opinions. Some support the policy and expressed their immediate participation, some said they want to buy a new car but it is difficult to apply for a quota, and some complained that "the subsidy is just pocket money, but what they lack is making money," just like the Beijing netizen said at the beginning.

Increasing subsidies, various regions continue to take measures

Here I would like to talk about the content of car trade-in.

First, it was released in the "Two Sessions" at the beginning of the year that 2024 is the basic direction of "Consumption Promotion Year", and the country will vigorously promote the replacement of old for new durable consumer goods such as home appliances and automobiles. Then, the old for new policy was soon launched in April. According to the provisions of the "Automobile Replacement Subsidy Implementation Rules", individual consumers who scrap old cars and buy new cars will receive a subsidy of 10,000 yuan for the purchase of new energy passenger cars and 7,000 yuan for the purchase of fuel passenger cars.

The "Notice" issued in August is an upgrade to the car trade-in policy released in April.

The first is to raise the standards. The subsidy standards will be increased from the original 10,000 yuan and 7,000 yuan to 20,000 yuan and 15,000 yuan respectively; the second is to retroactively apply the subsidies to eligible cars according to the new subsidy standards, and the subsidies already issued will also make up the difference; the third is to optimize the subsidy application review and fund disbursement process, and strive to allow consumers to get subsidies as soon as possible.

In my previous article, "Why don't you replace your "junk car" and keep it for the New Year?", I have also analyzed in detail the upgrade and potential changes of relevant subsidy standards. This is equivalent to the country's further attempt to stimulate automobile consumption and promote the transformation and upgrading of the industry in order to get you to replace your "junk car" or "old car".

However, less than half a month after the new policy was introduced, places including Beijing and Hangzhou began to increase subsidies and continuously introduced local subsidy policies, aiming to expand the scope of subsidies and lower the subsidy threshold so that more consumers can enjoy the subsidy policy.

Take Beijing as an example.

Recently, it was reported that many departments in Beijing are studying and formulating an implementation plan to further support equipment renewal and consumer goods replacement, which will be released soon. This plan will increase the original subsidy of 10,000 yuan to 20,000 yuan for scrapping old cars that meet the standards and purchasing new energy passenger cars.

Among them, for the scrapping of personal passenger cars, the subsidy standards in the "2024 Beijing Car Trade-in Subsidy Implementation Rules" are adjusted: for scrapping old cars that meet the standards and purchasing new energy passenger cars, the subsidy will be increased from 10,000 yuan to 20,000 yuan; for scrapping old cars that meet the standards and purchasing fuel passenger cars with a displacement of 2.0L or less, the subsidy will be increased from 7,000 yuan to 15,000 yuan.

Not only that, consumers who have already applied for subsidies in accordance with the previous "Implementation Rules" can be given additional subsidies according to the new standards. The above two types of used cars should be registered in the name of the applicant before July 25, 2024.

At the same time, Beijing will also introduce support policies for replacing and updating personal passenger cars with new energy vehicles.

In addition, Hangzhou has also introduced new policies on automobile subsidies.

The new policy mentioned that in order to further promote car replacement and renewal, individual consumers who scrap or transfer (excluding changes) their own passenger cars and purchase new passenger cars with 7 seats or less in Hangzhou can apply for a one-time car replacement subsidy.

According to the latest subsidy standards, fuel vehicles with a price between 50,000 and 150,000 yuan (inclusive) will receive a subsidy of 6,000 yuan, and new energy vehicles will receive a subsidy of 8,000 yuan; fuel vehicles with a price between 150,000 and 250,000 yuan will receive a subsidy of 8,000 yuan, and new energy vehicles will receive a subsidy of 10,000 yuan; fuel vehicles with a price of 250,000 yuan or more will receive a subsidy of 10,000 yuan, and new energy vehicles will receive a subsidy of 12,000 yuan.

The policy clearly states that there are no restrictions on the place where the vehicle is registered, licensed, or scrapped, and vehicles from other provinces can enjoy the policy as long as they are purchased in Hangzhou. However, the policy cannot overlap with the national automobile scrapping and renewal subsidy.

It can be seen that Beijing has differentiated the replacement standards for different models and price ranges, and Hangzhou has removed the subsidy threshold for "National III". From Beijing to Hangzhou, local subsidy policy updates are approached from different angles in order to lower the subsidy threshold and expand the subsidy scope. In addition, cities like Chengdu and Hainan directly provide consumption subsidies, ranging from 1,000 to 8,000 yuan.

Boost automobile consumption in the short term and promote industrial upgrading in the long term

After rounds of updates to the old-for-new policy, has automobile consumption increased?

In fact, with the joint efforts of many parties, the effect of the old-for-new policy began to show as early as May, the first full month of the launch of the first round of old-for-new policy this year.

Data shows that it took 25 days for the car trade-in information platform to receive the first application for car scrapping and renewal subsidies in the country and for the number of applications to exceed 10,000; it took 7 days from the 10,000th to the 20,000th application; and it took only 4 days to the 30,000th application... As of June 25, the car trade-in information platform had received 113,000 applications for car scrapping and renewal subsidies.

Under the influence of policies, the domestic automobile consumer market has also begun to regain vitality.

In May this year, the national automobile retail sales reached 2.271 million units, a year-on-year increase of 8.7%, of which the retail sales of new energy passenger vehicles increased by 38.5% year-on-year; the second-hand car transactions reached 1.585 million units, a year-on-year increase of 5.9%; and the number of scrapped vehicles recycled reached 523,000 units, a year-on-year increase of 55.6%.

According to the Ministry of Commerce's regular press conference, the number of applications for car trade-in subsidies has increased rapidly in the past three months, especially in the past two months, since the relevant policies were implemented. As of August 23, the number of registered users on the car trade-in information platform exceeded 1.1 million, and the number of applications for car scrapping and renewal subsidies exceeded 700,000, with more than 10,000 new applications in a single day.

At the same time, the automobile scrapping and renewal policy has led to a rapid increase in the amount of scrapped vehicles recycled.

Data shows that in the first seven months of this year, 3.509 million scrapped cars were recycled nationwide, a year-on-year increase of 37.4%. Among them, May, June and July increased by 55.6%, 72.9% and 93.7% year-on-year respectively.

It is foreseeable that as local governments increase their policy efforts, new energy vehicle consumption, second-hand car transactions and scrapped car recycling will be further boosted in the future. In addition to stimulating the market, these data will also have a profound impact on the transformation and upgrading of the domestic automobile industry.

After all, the automobile industry is an important pillar industry of my country's national economy, accounting for about 10% of the total retail sales of consumer goods, and the proportion of related taxes in the total tax revenue and the number of employees in the total number of urban employees are also about 10%. The upgrading of the automobile industry is of great significance to the national economy, and the automobile trade-in policy is an important part of promoting the development of the industry.

In this industrial upgrade under the guise of "trade-in", the policy achieved a phased victory when the favorable preferential policies met the potential market demand. While providing users with a better consumption experience, it also expanded the share of new energy vehicles in China's new energy vehicle industry, laying a solid foundation for the development of the new energy vehicle industry.

Of course, in the first round of subsidies, only a few hundred thousand cars met the subsidy conditions, which is far from a success for an economy with monthly car sales of more than 2 million. The new round of policies, with replacement subsidies of up to 20,000 yuan, has also created new consumer benefits. In the future, with the arrival of more local subsidy policies, the scale of participation in car trade-ins will be larger, the effect will be better, and the impact will be deeper.

Some industry insiders believe that the introduction of detailed rules for old-for-new exchanges will help further increase the penetration rate of new energy vehicles in my country.

Indeed, at a time when new energy is experiencing explosive growth, domestic production and sales of new energy vehicles reached 984,000 and 991,000 respectively in July, up 22.3% and 27% year-on-year respectively. The monthly retail penetration rate of new energy vehicles successfully exceeded 50%; in the first seven months, production and sales of new energy vehicles reached 5.914 million and 5.934 million respectively, up 28.8% and 31.1% year-on-year respectively.

With the accelerated growth of the automobile scrapping and renewal market and the accelerated implementation of old-for-new and scrapping and renewal subsidy policies in various places, the demand for automobile replacement is expected to further drive the growth of automobile consumption. The implementation of relevant preferential policies is expected to play a positive role in promoting the growth of automobile sales in the second half of the year.