The pressure of digestion and inventory will increase sharply in many places before July 1 in accordance with the Sixth National Standard Automobile Enterprises.

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 The pressure of digestion and inventory will increase sharply in many places before July 1 in accordance with the Sixth National Standard Automobile Enterprises.


Comprehensive judgment, if there is no strong promotion policy support, in the region ahead of the implementation of the six national standards, the five national vehicle inventory is difficult to fully digest before July 1. Ye Shengji, deputy secretary-general of the China Automobile Industry Association, told the Economic Daily that various regions could accelerate the promotion of the scrapping and renewal of old vehicles and give the five models a full transition period.

Standard implementation ahead of schedule exceeded expectations

The automobile industry resolutely supports the national policies for air pollution control. Ye Shengji said that after the Three-year Action Plan for Winning the Blue Sky Defense War put forward the requirement of implementing the Sixth National Emission Standard in advance, automobile companies began to readjust their product development plans and actively respond to the early switch of standards.

The pressure of digestion and inventory of automobile enterprises has increased sharply

Since 2019, the passenger car market has continued its downward trend since last year. The fall of VAT in April affected the pace of car arrival of dealers. Consumersexpectations of market promotion policies and the early implementation of the Sixth National Standard further intensified the consumers wait-and-see sentiment.

As of April 2019, Chinas passenger garage sales ratio reached 3.1, far higher than the industrys 1.5 warning line; the industrys overall inventory is about 4.5 million vehicles, and Guowus inventory is about 3.2 million vehicles.

Data show that from January to April, the main economic indicators of 17 key automotive enterprises (groups) declined in an all-round way. The total profits and profits and taxes of automotive enterprises decreased by 20.5% and 20% respectively from the same period of last year. Compared with the data from January to March, the decline increased by 3.8% and 4.1% respectively.

According to the data of China Automobile Technology Research Center, the output rhythm of the industry in April has shown obvious signs of reducing the production of five models and increasing the proportion of six models, but it has not yet achieved rapid switching (affected by spare parts supply, production preparation and other factors), and the proportion of five models in April is still close to 50%. It is expected that in May, the proportion of vehicle production in some enterprises is still on the high side. Mainstream manufacturers will complete switching work in areas where the Sixth National Standard is implemented ahead of schedule or postpone it to June.

Promoting the Renewal of Old Vehicles

As for the pressure faced by the automobile industry, Ye Shengji believes that we should start with encouraging the elimination of vehicles with backward emission standards and giving the five models a full transition period.

It is suggested that vehicles with backward emission standards be encouraged to be eliminated. In the areas where the Sixth National Standard is implemented in advance, the second and lower discharged vehicles from scrapped countries should be merged with the fifth purchased vehicles and allowed to be sold and registered until the date when the Sixth National Emission Standard is implemented nationwide (July 1, 2020). Ye Shengji said that from the point of view of controlling the total amount of pollutants and improving the overall effect of environmental protection, we should encourage the elimination of vehicles with backward emission standards, promote the scrapping and renewal of old vehicles under the second national standard, and focus on solving the problem of the stock backlog of five national vehicles in the area of implementing the sixth national standard in advance.

In addition, Ye Shengji also suggested that in areas where the six national standards were implemented in advance, local governments could give full transitional period according to the local five-vehicle inventory situation; at the same time, it was clear that the policy of using and discarding the five-vehicle model remained unchanged, so as to avoid the impact of consumer confidence, so as to ensure market stability and enable enterprises to smoothly pass the switching period.