Metals News
Can the policy "break the ice" where the car market will go in the second half of winter?
Aug 14,2019
The content below was translated by Tencent automatically for reference.

SMM News: due to macroeconomic, big cities to restrict the purchase of traffic restrictions, as well as import tariffs and other factors, in 2018, China's auto market ushered in the first decline in 28 years. In 2019, the relevant departments came out of Taiwan with a series of policies related to the automobile market, hoping to inject a "booster" into the car market.

New policies of car Market in the first half of the year

In fact, just entering 2019, in order to promote the steady growth of consumption in the automobile industry, ten ministries and commissions, including the National Development and Reform Commission, jointly issued the "implementation Plan for further optimizing supply, promoting steady growth in consumption and promoting the formation of a strong domestic Market (2019). Six major measures have been put forward to promote automobile consumption. It includes promoting the scrapping and updating of old cars in an orderly manner, continuously optimizing the subsidy structure of new energy vehicles, promoting the upgrading of rural vehicles, steadily relaxing the restrictions on the entry of pick-up trucks into cities, speeding up the prosperity of the used car market, and further optimizing the motor vehicle management measures of the local government.

The exit of the program can be understood as the resumption of the policy of cars going to the countryside again, which is a great stimulus for rural users to buy small-engine passenger cars, especially for independent brands whose channels are deeper. It is also a great benefit, as it is in line with the sinking of the automobile sales channel.

Immediately following the full implementation of the VAT tax rate reduction policy from April 1, in particular, the current VAT rate in the manufacturing industry will fall sharply from 16% to 13%. As soon as the news came out, luxury brands first made efforts to respond to national policies and cut product guidance prices, and then mainstream joint venture brands led by North and South Volkswagen and some independent brands responded one after another, forming a large-scale official decline in the car market. Car companies have also stimulated some of the demand after making profits, which has played a certain role in promoting the sales of the car market.

In addition to the favorable policies at the national level, some local governments have also stepped in one after another, taking the initiative to implement measures to restrict the purchase of "deregulation" measures. In early June, Guangzhou and Shenzhen announced that from June this year to December next year, the two cities each increased the increment index of small and medium-sized buses by 100000 and 80, 000. This is also a major benefit for consumers living in restricted cities.

Of course, there are some relatively negative, such as the new energy car subsidy policy landed at the end of March, after a three-month transition period, the new energy vehicle market in July ushered in rapid growth after the decline in sales.

But the country's move is also for a more regulated and healthier development of the new energy market, so the overall growth of new energy should continue, but there will be some volatility in the short term.

It also includes, for example, the implementation of national six standards on July 1, which led to a frenzied inventory clearance of national five models. As a result, there was a sudden reversal in sales in June, but it was only based on a sharp cut in sales, and it was still very difficult to maintain in the future.

Today, more than halfway through 2019, it is a pity that both the policy guidelines of various departments and the favorable policies of the relevant local governments have not been able to achieve the desired results in a short period of time, and the car market has not ushered in the expected bottom rebound.

Where does the car market go in the second half of the year?

Although the appearance of a good policy will set off the most exciting part of buying a car, the stimulus of the policy is not a "stimulant" and needs to be seen in the longer term.

As for the forecast of the car market in the second half of the year, Cui Dongshu, secretary-general of the National passenger car Market Information Association, believes that there is an opportunity for recovery growth in the second half of the year. "in the second half of the year, the market will gradually enter the inventory cycle, and the overall market demand will gradually pick up with the landing of the policy and the holding of money to be purchased," he said. And the second half of last year fell significantly, after the decline in the base, there is likely to be a recovery after September. The key is to have some support to stimulate consumption, to improve consumer investment, to further land government policies, and so on. "

At present, the domestic automobile market has changed from increment to stock, but new forces have been pouring in recent years. It is clear that domestic car capacity has been overcapacity, only on the stimulus of policy may have been difficult to digest, so the industry reshuffle has become inevitable.

At present, China's economy is also in the midst of a big cycle of change, and there is no need to be pessimistic about the automobile industry. With the gradual application of 5G technology, the automobile industry is at the forefront of the new scientific and technological revolution.

In this era of change, who can gain insight into the needs of users, who will be able to seize the first opportunity. Therefore, although there is a policy to assist, but the core is still the product power. Whether it is independent brands, joint venture brands or new forces, as long as there are good enough products, and grasp the future trend, it will certainly be supported by consumers.

"Click to enter the registration page

Scan QR code and apply to join SMM metal exchange group, please indicate company + name + main business


car markets
For queries, please contact Frank LIU at
For more information on how to access our research reports, please email
Related Price

No Data