Financial Services Association, April 29 (Reporter Liu Yang) Combined with factors such as the intense hosting of the Beijing Auto Show and the successive introduction of “trade-in” policies and rules by local authorities and companies, the market closed on April 29, and related sectors, including complete vehicles, car dismantling, and auto parts, once again strengthened collectively. Among them, stimulated by the continuous introduction of local automobile consumption policies, Hong Kong stocks such as Zero Run, NIO, and Ideal have generally risen; among A-shares, Zotye Auto rose the most, to 6.67%, and at one point it was close to a standstill in the intraday period.

Since nine ministries and commissions, including the Ministry of Commerce and the Ministry of Finance, jointly issued automobile “trade-in” subsidy rules on April 26, according to incomplete statistics from the Financial Federation reporter, provinces and cities including Beijing, Henan, Inner Mongolia, Guangzhou, and Wuhan have introduced local subsidy rules. On April 29, the Guangzhou Municipal People's Government issued the Guangzhou Municipal Implementation Plan to promote large-scale equipment renewal and consumer goods trade-in. The plan is proposed to support car trade-in. Continue to implement the NEV vehicle purchase tax reduction policy, and optimize fuel vehicle licensing index restrictions in line with the actual industry in Guangzhou.

Unlike Guangzhou's consumer stimulus package combining “trade-in” and “fuel vehicle licensing deregulation,” the Inner Mongolia and Beijing local policies introduced on April 29 and 28 directly provided more specific replacement subsidy amounts. Among them, Inner Mongolia made it clear that individual consumers can apply for a 12,000 yuan/vehicle subsidy for new energy passenger vehicles included in the Ministry of Industry and Information Technology's “Catalogue of New Energy Vehicle Models Exempt from Vehicle Purchase Tax”; they can apply for a subsidy of 9,000 yuan/vehicle for scrapping passenger cars with fuel emission standards below 2.0L (inclusive) emission standards. Beijing's subsidies for these two types of vehicles are 10,000 yuan and 7,000 yuan, respectively.

According to the policy rules issued by seven departments on April 26, automobile “trade-in” subsidy funds are generally shared between the central government and local finance in a 6:4 ratio, and specific sharing ratios are determined by region. Among them, the eastern provinces are shared according to the 5:5 ratio, the central provinces are divided according to the 6:4 ratio, and the western provinces are shared according to the 7:3 ratio. The provincial finance department takes the lead in implementing the portion of the local burden.

“The subsidy of 70 to 10,000 is roughly equivalent to 5% of the price of a car. If the short-term price flexibility is 1-2, it corresponds to a 5% to 10% industry drive.” Gong Min, head of research on the Chinese automobile industry at UBS, believes that according to estimates, this round of the “trade-in” subsidy policy for automobiles will roughly bring an increase of 1-2 million new vehicles.

This figure is roughly in line with previous predictions from institutions such as Everbright Securities and Huatai Securities. Everbright Securities predicts that the central government's “trade-in” is expected to drive an increase of 1-2 million vehicles: it is expected that this round of scrapping will bring an incremental scale of 1 million to 2 million vehicles to the domestic market, accounting for about 3.2%-6.5% of the total domestic automobile market share. Huatai Securities, on the other hand, said that assuming that 30%, 35%, and 40% of the eligible models are upgraded and replaced within the year, the corresponding subsidy amounts are about 38.9 billion yuan, 45.4 billion yuan, and 51.9 billion yuan respectively. At the same time, incremental sales of about 170, 260, and 3.5 million vehicles can be increased compared to the normal renewal cycle without policy incentives.

Not only did the central government and local authorities cooperate, but after the “trade-in” policy rules were issued, many automakers also responded positively. On April 28, Changan Automobile officially announced that it will launch an exclusive “trade-in” promotion. The comprehensive subsidy can reach up to 57,000 yuan. Brands participating in the preferential policy include Changan Qiyuan, Avita, Deep Blue Auto, and Changan Automobile. The day before, Mercedes-Benz introduced a maximum subsidy of 45,000 yuan in response to the call for “trade-in” in response to the call for “trade-in”. While receiving a one-time fixed subsidy from the country, you can also enjoy the “0 down payment 0 year rate” value-added financial plan while enjoying an additional “better and better” car purchase subsidy of up to 15,000 yuan.

“The implementation of the trade-in policy is a major benefit to the car market.” Cui Dongshu, Secretary General of the Passenger Federation, wrote that the auto market retail sales in May were significantly better than in April, and the total amount of scrapping is expected to reach nearly 10 million. “Automobile trade-in subsidies will bring an increase of one million to private new car consumption in the car market, and can also bring an annual consumption increase of more than 100 billion dollars. The car market will surely sweep away the slump and achieve good growth in May.”

According to the Passenger Federation's forecast, the passenger car retail market in the narrow sense of April was about 1.6 million units, down 1.5% from last year and 5.3% from the previous month; retail sales of new energy vehicles are expected to be around 720,000 units, the same as last month, with a year-on-year increase of 37.1%, and the penetration rate is expected to reach 45.0%.