In the first half of February, the car market dropped by more than 90percent? Dont panic, the policy is coming!

category:Finance
 In the first half of February, the car market dropped by more than 90percent? Dont panic, the policy is coming!


As a strategic and pillar industry of national economy, automobile industry is one of the key industries supporting the high-quality development of trade. Today, the impact of the epidemic is still continuing, and stable automobile consumption policy is in the works. On February 20, the Ministry of Commerce made it clear that it would thoroughly implement the central governments important decision-making and deployment on actively stabilizing traditional bulk consumption such as automobiles and the spirit of the opinions of the general office of the State Council on accelerating the development of circulation and promoting commercial consumption. At present, Foshan, Guangdong Province has launched measures to stimulate automobile consumption. In the future, more regions are expected to introduce corresponding stimulus policies.

Severe test of the car market

According to the data of the National Joint Conference on passenger vehicle market information, in January 2020, the sales volume of narrow sense passenger vehicle market in China was 1.699 million, down 21.5% year on year and 20.8% month on month. In the first half of February (February 1-16), the retail sales of domestic passenger car manufacturers fell 92% year on year, a record drop.

Affected by the epidemic, the relevant enterprises, including the whole vehicle, parts and dealers, were significantly under started, resulting in a sharp decline in automobile production and sales in January and February.

According to the analysis of China Association of automobile industry, in the short term, the demand and consumption capacity of car purchasing have declined significantly, while the production of enterprises has been hindered, and the export difficulties have increased, especially for some small and medium-sized parts enterprises. This will have a great impact on the automobile market in the first quarter of this year, and the industrys production and sales will decline significantly. Chinas novel coronavirus pneumonia has more economic impact than the SARS epidemic in 2003, said Jianhua, deputy secretary-general of the China Automobile Industry Association.

According to the data, Hubei Province, the core area of the outbreak, will produce 2.24 million vehicles in 2019, accounting for 8.8% of the national output. Hubei is one of the four automobile production bases in China, which gathers many automobile and parts manufacturing enterprises, including Dongfeng Motor, SAIC General Motors, camel Co., Ltd. and Steyr, etc.

According to the latest guidance of the government, the resumption time of vehicle enterprises and parts enterprises in Hubei has been further postponed to March 11. Including Shenlong Automobile, Dongfeng Honda, SAIC GMs Wuhan plant, as well as a number of parts companies will further postpone the resumption of work, and the cumulative period of suspension will exceed one and a half months. This also means that even if the auto dealers open normally, the terminal sales can not be carried out, especially the popular brand models such as Dongfeng Honda.

According to the analysis of China Travel Federation, most of the manufacturers in February have been working, but due to the long automobile industry chain, it is difficult to fully resume production. Therefore, although the marketing system has been started after the festival, the follow-up speed of production logistics is slow, resulting in low wholesale sales data.

Urgent need for policy to save the market

In the face of the current difficulties faced by the automotive industry, a number of stimulus measures are coming out.

On February 15, Qiushi magazine published a programmatic guidance plan on the epidemic at the central level, pointing out that expanding consumption is one of the important focuses to hedge the impact of the epidemic. It is necessary to actively stabilize traditional bulk consumption such as automobiles, encourage regions with limited purchase of automobiles to appropriately increase the number plate allocation, and promote the consumption of automobiles and related products.

On February 20, the Ministry of Commerce said that it would thoroughly implement the central governments important decision-making and deployment on actively stabilizing traditional bulk consumption such as automobiles and the spirit of the opinions of the general office of the State Council on accelerating the development of circulation and promoting commercial consumption. Wang Bin, deputy director general of the market operation Department of the Ministry of Commerce, said that the Ministry of Commerce will study and issue policies and measures to further stabilize automobile consumption with relevant departments, and encourage all regions to introduce measures to promote new energy automobile consumption, increase the purchase restriction index of traditional automobiles and carry out automobile trade in according to local conditions, so as to promote automobile consumption.

It is worth mentioning that Guangdong Province has responded quickly and launched specific programs. Foshan Municipal Government of Guangdong Province has decided to implement the plan of several measures to promote the consumption upgrading of the automobile market from March 1. Consumers can directly obtain the governments financial subsidy of 2000 to 5000 yuan for purchasing new cars, and the validity of the plan is one year. On February 21, the government of Guangdong Province issued several policies and measures to further stabilize and promote employment in Guangdong Province, which proposed to promote the conditional cities to issue the subsidy policy for scrapping and upgrading old cars, and encourage Guangzhou and Shenzhen to further relax the car lottery and bidding indicators.

At the same time, the China Automobile Industry Association has also made efforts to promote the implementation of the national six emission standards, reducing pressure for manufacturers. According to Chen Shihua, deputy secretary-general of the association, the association has submitted proposals to relevant departments to postpone the implementation of the six national emission standards nationwide, but it is only in the recommended state at present, and it is not known whether it is adopted. According to the previous regulations, from July 1, 2020, all light vehicles sold and registered shall meet the 6A limit requirements of this standard. This also means that the countrys five emission vehicles in the implementation of the countrys six a emissions areas will not be able to license. In the face of the special situation brought by the epidemic, the switching of national six emission standards according to the original plan will also bring greater pressure to the automobile manufacturers.

In addition, the Federation believes that the promotion of sales fees also needs to promote the first purchase of new cars. For this reason, the Federation proposed measures such as halving the purchase tax, sending electric vehicles to the countryside and paying off the purchase tax. At present, whether at the national level or at the local level or the enterprise itself, active self-help has become the direction of concerted efforts from the whole industry. Industry analysts believe that after the outbreak, the auto market will usher in a certain rebound. But there are still different opinions on the sales trend of the whole year. Without considering the risks brought by special factors, the market will still have the possibility of achieving positive growth from March to December 2020. Cui Dongshu, Secretary General of the Federation, predicted. The CAAC believes that after the epidemic, the restrained consumption demand will be released in the short term, and the trend of the whole year will be low before and high after, but the overall development situation of the automobile market is still not optimistic. Source: responsible editor of China News Weekly: Yang bin_nf4368

In addition, the Federation believes that the promotion of sales fees also needs to promote the first purchase of new cars. For this reason, the Federation proposed measures such as halving the purchase tax, sending electric vehicles to the countryside and paying off the purchase tax.

At present, whether at the national level or at the local level or the enterprise itself, active self-help has become the direction of concerted efforts from the whole industry. Industry analysts believe that after the outbreak, the auto market will usher in a certain rebound. But there are still different opinions on the sales trend of the whole year. Without considering the risks brought by special factors, the market will still have the possibility of achieving positive growth from March to December 2020. Cui Dongshu, Secretary General of the Federation, predicted. The CAAC believes that after the epidemic, the restrained consumption demand will be released in the short term, and the trend of the whole year will be low before and high after, but the overall development situation of the automobile market is still not optimistic.