The car market is plummeting due to repeated COVID-19 outbreaks in Korea caused by the introduction of a highly contagious variant virus.  China's auto sales fell 47.6 percent year-on-year to 1.181,000 units in April 2022, hitting a record low for the same period in the past decade.  

With a wave of the state, the Dragon Boat Festival holiday has just become a "car shopping festival" for many people.  It doesn't matter if you missed the holiday, the car-buying festival will continue for quite some time.  

On May 31, promulgated by the State Council concerning the notice issued by the solid steady economic package of policy measures, various departments must close coordination, the formation of work force, in accordance with the "solid steady economic package of policy measures put forward six aspects of 33 division of specific policy measures and arrangement, the field work in the industry and the deployment of the department to push to implement.  

In order to promote automobile consumption and support the development of automobile industry, based on the above requirements, the Ministry of Finance, the State Administration of Taxation, the Ministry of Industry and Information Technology, the Ministry of Commerce and other agencies also carried out detailed policy interpretation on reducing vehicle purchase tax, sending cars to the countryside, expanding the circulation of second-hand cars and other issues.  

The purchase tax will be halved for passenger cars with engines of 2.0 liters or less that are purchased between June 1, 2022 and December 31, 2022 and the price of each vehicle (excluding VALUE-ADDED tax) does not exceed 300,000 yuan, the Ministry of Finance and the State Administration of Taxation said in a joint announcement on The same day.  

At the same time, the General Office of the Ministry of Industry and Information Technology, the General Office of the Ministry of Agriculture and Rural Affairs, the General Office of the Ministry of Commerce, and the Comprehensive Department of the National Energy Administration issued a notice on launching the 2022 New energy vehicles to rural areas, encouraging local governments to introduce more supportive policies to promote the construction of rural electricity charging and replacement infrastructure.  Encourage relevant enterprises to actively participate in the "Double Goods Online Shopping Festival" and various online promotions on various platforms.  

Sheng Qiuping, vice minister of Commerce, also said at a press conference on May 31 that China will speed up the removal of unreasonable restrictions on second-hand car transactions, strictly implement the policy of abolishing all restrictions on the relocation of second-hand cars, and promote the commercialization and large-scale circulation of second-hand cars.  

According to Eeou Auto statistics, within two days after the release of the policy, more than 30 auto companies increased incentives to attract consumers through the purchase tax exemption.  In addition, there are more than 70 models participating in the 2022 new energy vehicles to rural areas, and some second-hand car practitioners also show strong confidence.  

According to Cui Dongshu, secretary general of the China Passenger Car Information Association, the purchase tax halving policy alone is expected to add 2 million cars to China's car market.  

60 billion that will benefit tens of millions of people.  

The policy of halving the purchase tax for passenger cars with engines of 2.0 LITERS or less within 300,000 yuan in 2022 has been the third time for China to halve the loan purchase tax to stimulate the car market.  As consumers see the price of the whole vehicle is added with a 13 percent value-added tax, this means that passenger cars with engines of 2.0 liters or less priced at 339,000 yuan on the market are covered by the subsidy.  

Previous policies to stimulate the car market with the help of purchase tax incentives have achieved obvious results.  Compared with the previous preferential purchase tax policy, this preferential policy changes the emission threshold limit from 1.6L to 2.0L, covering a wider range of models.  

According to data released by the China Passenger Car Information Association, fuel cars accounted for 86 percent of the 20.15 million passenger cars sold in 2021, while models with displacement below 2.0L accounted for 84 percent of the fuel car market.  Even if the price is capped at 300,000 yuan or less, the market size covered by this round of purchase tax incentives is more than 10 million vehicles.  

According to the plan, more than 60 billion yuan is expected to be cut from the purchase tax.  

With the policy of halving loan purchase tax, the Great Wall, Geely, Volkswagen, Toyota and other major independent and mainstream joint venture brands have launched additional preferential activities, and even some luxury brands have joined in.  Subsidizing the other half of the purchase tax, so that consumers enjoy the purchase tax exemption has become the most important preferential way.  Changan, SAIC Mg and other car companies even shouted out the purchase tax of more than 120 percent of the slogan.  

In addition to the purchase tax exemption, some car companies are also in replacement, loans, insurance, quality assurance and other aspects of the concession.  

Although the national purchase tax incentives continue until the end of the year, there are still a considerable number of car companies will increase the preferential activities of the deadline for June 30.  On the one hand, car companies can reduce the total amount of subsidies while attracting consumers. On the other hand, their limited budget can attract more consumers in a short term.  

Because the purchase tax subsidy coverage is wider, some popular models are also involved.  Therefore, with the decline of subsidies, some dealers have also reduced the corresponding range of discounts for popular models.  For car consumers, they need to keep their eyes peeled to get their cars at a reasonable price.  

From the three words of "purchase tax", it is not difficult to see that new energy models without purchase tax are not affected by the policy.  So, how to stimulate new energy vehicles?  

More than 70 new energy vehicles will go to the countryside  

According to the statistics of China Association of Automobile Manufacturers, in 2021, China's new energy vehicle sales of about 3.52 million, including the annual new energy vehicle to the countryside to complete a total of 1,068 million vehicles, a year-on-year growth of 169.2%, higher than the overall growth of new energy vehicle market in the same period of about 10%.  

The Ministry of Industry and Information Technology released on May 31, 2022 new energy vehicles to the countryside to participate in the automobile enterprises and models list, a total of 26 announced car companies.  According to Yiou Automobile, these 26 auto companies involved in a total of 32 auto brands, including independent brands, joint venture brands, more than 70 models.  

In contrast, in 2021, 18 companies will participate in the new energy vehicles to the countryside, involving 52 new energy models in total.  The participation of more car companies and models shows their recognition of the sales promotion effect of this activity from the side.  

From previous years, participating in the activities of new energy vehicles to the countryside car companies will be in line with the actual needs of the third and fourth tier cities and rural areas "take the initiative to yield profits".  However, in 2022, there will be a significant increase in the price of battery raw materials, which may have a negative impact on the final incentive level of automakers.  

In view of the 2022 new energy vehicles to the countryside, the Ministry of Industry and Information Technology, the Ministry of Agriculture and Rural Affairs, the Ministry of Commerce, the National Energy Administration said in the document, encourage the introduction of more new energy vehicles to the countryside support policies, improve the use of new energy vehicles, promote the construction of rural electricity charging infrastructure.  

In addition, four ministries and commissions, said encouraged to participate in the rural development of new energy vehicles related enterprises to actively participate in the "double goods online shopping festival", and the platform organize all kinds of network promotion, support enterprises to cooperate with electricity and Internet platforms live or online shopping activities, through online sales and attract more consumers to buy.  

The shortest time to purchase a second-hand car is 24 hours  

It is also important to invigorate the used car market while stimulating new car trade.  

Data from China Automobile Dealers Association show that in April 2022, the transaction volume of used cars in China was 1,100,600, down 26.10% year on year.  In the first four months, the cumulative transaction volume of used cars nationwide was 4.9802 million, down 8.54 percent year-on-year.  

In addition to the impact of the epidemic, the "migration restriction" problem that has plagued China's second-hand car market for many years is also an important factor restricting the development of second-hand cars.  

On May 31, promulgated by the State Council "about printing solid steady economic package HJHK; '/ notice made clear that policy measures, will abolish all used car limit migration policy, cancel all over the country to comply with the five small non-operational used car move to limit emissions standards, perfect the used-car market main body registration registration, registration and vehicle transaction regulations.  

"Restricted relocation" of second-hand cars refers to policies and measures formulated by some local policies to restrict the migration of second-hand cars from other places to local areas through thresholds such as displacement and age.  Previously, Beijing, Tianjin, Hebei province and other cities have implemented policies to allow used cars that meet national vi emission standards to enter the local market.  

On April 1, 2020, Beijing began to implement the used car immigration standards in strict accordance with the National Emission standard 6, while vehicles below the national emission standard 6 can only move or move out of the city.  In addition, tianjin, Shanghai, guangdong province, Haikou city, Sanya city, and most cities at prefecture-level and above in Jiangsu province and Zhejiang Province also require that only used cars with national VI emission standards can be moved into the local market.  

The second-hand car industry has a strong car source attribute, and the developed areas are the gathering places of high quality cars.  Restricted by the relocation policy, the circulation of high-quality vehicles is blocked, inhibiting the release of car demand.  In addition to consumers, used-car trading platforms such as Guazi, Dasoche and Youxin, as well as used-car dealers, will benefit.  

"The lifting of restrictions on the circulation of second-hand cars and the facilitation and digitization of vehicle inspection, citizenship transfer and registration will further smooth the circulation of second-hand cars in other places, shorten the time for purchasing cars in other places, and help unleash the consumption potential and form a nationwide circulation of second-hand cars.  This will provide a strong circulation environment to support the recovery of the used car industry after the epidemic."  Guazi used car co-founder, senior vice president Wang Xiaoyu said.  

Taking Guazi as an example, with the cancellation of the migration restriction policy, the average delivery time of the platform will be shortened by 8 days, and the delivery can be completed in 24 hours at the earliest.  The used-car industry is expected to pick up in the second half of the year as demand for cars is released and consumer confidence recovers, wang said, adding that consumer demand will be released during the traditional peak sales season from September to December.  

At the same time, the smooth sale of second-hand cars is also conducive to the release of consumption demand for new cars and second-hand cars, invigorate the whole domestic automobile consumption market, and promote the great circulation of cars in China.  

conclusion  

Not only the national level, some local governments have also begun to roll out preferential policies.  On April 27, Guangdong province issued a notice on measures to further promote consumption.  Since then, Liaoning, Henan, Shanghai, Tianjin, Zhejiang, Fujian, Jiangsu and other provinces and cities have issued relevant policies and measures to encourage car consumption.  

From the perspective of the policies of local governments, the main stimulus measures include subsidies for replacing old vehicles with new ones, issuance of consumer vouchers, and relaxation of purchase restriction licenses.  As of June 2, only Guangdong province, Shenzhen, Shanghai and other provinces and cities to limit the purchase of cars to stimulate the market has increased a total of 125,000 car purchase targets.  

From the market feedback, this wave of preferential policies did play a certain role in stimulating.  Beijing a joint venture brand 4S shop sales staff said to Yiou Automobile, only From June 1 to June 5 sales have exceeded the whole month of May just past.  According to NetEase Auto, some Dealers in Guangdong even completed the trading volume of the previous month in a single day at the Shenzhen-Hong Kong-Macao Auto Show.  

In 2009, for the first time, China introduced the policy of reducing the purchase tax of passenger cars with 1.6L and below displacement, which helped the car market soar 52% in that year.  While the stimulus effect of the second halving of the purchase tax was less pronounced, it was enough to generate 21.4 percent year-on-year growth in passenger vehicles with engines of 1.6 liters or less in 2016.  

Under the epidemic situation, it is difficult for the purchase tax exemption policy to drive China's auto market to reach the growth rate of 2009.  However, Yiou Auto believes that due to a small base in 2021, this round of large-scale and powerful market stimulus policies will certainly bring the market lifting effect beyond 2016.