[SMM Steel Market Morning News] A number of policies and measures to promote automobile consumption have been released to boost the current automobile market.

Wednesday, 1 April 2020

Rising factor

1. A number of policies and measures to promote automobile consumption have been issued to boost the current automobile market.

In order to promote automobile consumption, the standing Committee of the State Council decided that first, the policy of subsidizing the purchase of new energy vehicles and exempting them from purchase tax should be extended for two years. Second, the central government has adopted awards instead of subsidies to support the elimination of diesel trucks with emission standards of country III and below in key areas such as Beijing, Tianjin and Hebei. Third, VAT will be levied on the sale of used cars by used car dealers from May 1 to the end of 2023 on the basis of 0.5% reduction in sales.

2. Executive meeting of the State Council: determine the issuance of a further batch of special debt quotas for local governments in advance to promote the expansion of effective investment

Premier Li Keqiang presided over an executive meeting of the State Council on March 31, which pointed out that it is necessary to further increase the scale of special debts for local governments, on the basis of some of the special debt limits that have been issued in the previous period this year, pay close attention to issuing special debts of a certain scale in advance in accordance with the procedures, and tilt areas with a large number of key projects and low risk levels in accordance with the principle of "funds follow the project." All localities should step up issuance and strive to complete the issuance in the second quarter. The meeting pointed out that the deployment will strengthen financial support for small and medium-sized enterprises, strengthen inclusive financial support for small and medium-sized enterprises, and increase the reloan and rediscount amount of 1 trillion yuan for small and medium-sized banks.

Falling factor

1. EU: commercial vehicle sales fell 6.2 per cent to 155000 in February

In February 2020, sales of new commercial vehicles in the European Union were 155000, down 6.2 percent from a year earlier, according to a statistical report released by ACEA. Of this total, Germany fell 7.6%, Spain 5.9% and Italy 4.0%. Between January and February 2020, EU commercial vehicle sales totaled 308000, down 8.9 per cent from a year earlier. Of this total, Spain fell 12.8%, Germany 7.6%, France 3.6% and Italy 3.5%.

2. Bureau of Statistics: the survey results show that the pressure on the production and operation of enterprises is still great.

Although manufacturing PMI rebounded sharply in March, the survey results showed that the pressure on production and operation remained high. The proportion of companies reflecting tight capital and insufficient market demand this month were 41.7 per cent and 52.3 per cent respectively, up 2.6 and 4.1 percentage points from the previous month. From the perspective of the external environment, the epidemic situation has spread rapidly around the world, and the growth of the world economy and trade has been seriously impacted, which has brought new and severe challenges to China's economy. In March, China's manufacturing new export order index and import index were 46.4% and 48.4%, respectively.

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