On 22 june, the state council convened a general meeting to clarify that “the restrictions on the movement of small, non-operational used vehicles were fully lifted as of 1 august, and the transfer of registrations were signed separately and temporary plates were issued as of 1 october”。
The reduction of taxes on vehicle purchases, subsidies for the purchase of new energy vehicles, etc., and the deployment of new energy vehicles for the 2022 countryside have led to a series of policy initiatives to promote car consumption over the past two months, which have resulted in “heating” the automobile market。
On 22 june, the state council convened a general meeting to focus on the promotion of car consumption, to continue to stimulate the potential of the vehicle market through a series of deployment policy initiatives, and to forecast an increase in vehicle and related consumption of approximately $200 billion this year。
The phrase “for small non-operational second-hand vehicles, the full removal of the restrictions on moving into the country as of 1 august and the introduction of separate tags and temporary badges for the transfer of registrations as of 1 october” was the subject of considerable attention and discussion. According to some practitioners, “spring, which belongs to the used car market, is really coming”。
Unrestricted market dynamics
It is well known that, due to the advantage of the condition, price and quantity of second-hand cars in second-line cities, the pattern of circulation in the second-hand car industry is usually “from high-line to low-line cities”。
At the same time, the growth and prosperity of the used-car industry is closely linked to the mobility policy. Prior to that, some local governments had adopted a restrictive policy to protect the local automobile market from price shocks caused by the influx of large numbers of non-field used vehicles, and had refused to license non-compliant used vehicles。
“in this case, the first- and second-line cities, which had previously been subject to restrictive policies, were blocked from moving to low-line cities, making it difficult to sell vehicles in the first- and second-line cities.” wilson analyst xu hong said。
Xu hong stated that the market for second-hand cars in the 3-4 and 5-line cities would also result in a lack of high-quality vehicles, creating a mismatch between supply and demand, and ultimately inhibiting the release of the demand for cars in these low-line cities。
In the view of a number of industry, restrictive policies have significantly restricted the cross-regional trade of used vehicles, which are not well-traffic across regions, exhibit regional flows, supply and demand mismatches and do not create a truly national market。
Today, as domestic automobile consumption moves from an incremental to a stock market, car replacements, second-hand car trading becomes a new engine to boost car consumption, and the free flow of second-hand cars will accelerate the release of demand for car consumption。
“in this context, the lifting of the policy of restrictions on movement and the opening of blocks and blocks in the circulation of second-hand vehicles will boost the dynamism of the off-site trade of second-hand vehicles and lead to a sustained growth in the scale of trade in the industry. As the epidemic improves in the second half of the year, there will be an orderly resumption of work and a return to consumer confidence, and the demand for vehicles that will be temporarily contained by the epidemic will be gradually released.” the secretary-general of choi dong-soo of the joint committee on car market information said to the press。
Statistics show that in 2021 there were 178,851,000 used cars traded in the country, an increase of 22. 62 per cent over the same period. Benefiting from the policy dividend, it is expected that the increase of more than 20 per cent will continue this year。
It is clear that the untying of second-hand vehicles will accelerate the efficiency of their sale. During the replacement process, the penetration of new energy vehicles will increase. In addition to the state's policy of subsidization, registration and so forth, china's new energy vehicle development will be driven by its root causes, through the facilitation of second-hand car traffic links。
“with the removal of the restrictive policies, the penetration rate of new energy vehicles will increase, helping china to overwhelm the car industry and change the world's pattern of car industry development.” choi dong-soo stated that the smooth circulation of second-hand vehicles and the increase in the replacement of new vehicles would boost china's car flow, boost the sales of new vehicles and second-hand vehicles, and make china the world's largest market for automobiles。
The policy of “transfer registration of second-hand vehicles with separate billings and temporary issuances” is equally beneficial for market circulation and trading。
“the country's second-hand car trade has been carried out in the form of a transfer of title to assets, which is not a commodity attribute and involves multiple transfers at the time of receipt, sale and payment of taxes, which increases the cost of circulation. This is limited by the fact that second-hand car distributors have to buy and rent motor vehicle indicators in their operations, which passively increases the cost of doing business, labour and the cost of vehicle trading.” the co-founder of the second-hand car, wang xiaoyu, svp, analyses。
In the eyes of wang xiaowoo, after the implementation of the new deal, the second-hand car dealership does not have to cross after purchasing the vehicle, and the vehicle will be placed directly in the market after the vehicle has been singled out and issued a temporary number。
Wang xiaowoo made an account for journalists: “as is the industry practice, a single transfer of a vehicle would result in a loss of about 2 per cent of the cost of the vehicle. The reduction in the number of transfers will reduce the trading cycle of used vehicles, contribute to the stabilization of the price preservation of used vehicles and accelerate their circulation throughout the country.”
In addition, the new deal will address the problem of second-hand vehicle card blockage in some restricted cities due to limited licensing targets. The smooth flow of second-hand vehicles will accelerate the sale of second-hand vehicles, facilitate faster replacement of new vehicles and accelerate the release of vehicle consumption potential。
New opportunities for change in the used-car industry
In fact, the removal of restrictions on the movement of used vehicles is the basis for the national movement of used vehicles and is an essential condition for the process of upgrading the trade lines of used vehicles, which will stimulate second-hand car enterprises to accelerate change and explore new development models。
Wang xiaowoo said: “with the lifting of the restrictions, we will act as an industrial infrastructure for the electric power company, helping the stationiers to sell throughout the country, accelerating the upward and digitalization of the domestic second-hand car industry and changing the traditional pattern of the second-hand car being traded off-line.”
According to wang xiaowoo, at present there are more than 10,000 car dealers in second-hand trucks. They provide traffic, big data, testing, quality assurance, dsn members, 7 days of unprovoked return, logistics, car loans, competitive collections, etc。
Statistics show that the presence of high-quality drivers in the country has resulted in more than 70,000 vehicles being sold to platforms, about eight times larger than the market for second-hand cars under large traditional lines。
It is worth noting that, while enriching consumers ' choices, motorists have been able to deal directly with national customers online, expanding marketing channels。
Journalists have learned that domestic motorists are currently dominated by small and medium-sized enterprises (msmes) and lack the capacity to trade, logistics, delivery, after-sales and have a strong national commitment to cross-regional flows. The second-hand car operation, which covers more than 200 mainstream cities across the country, will use the network advantages of the national platform and the industrial infrastructure to help drivers to move across regions and to sink better into low-line cities, where sales are no longer limited to local areas and where matching efficiency is greatly improved。
“in the case of jiangsu, for example, through access to the guangdong, the jiangsu car dealer sells high-quality second-hand vehicles to more than 170 cities throughout the country, in addition to the cities in and around nanjing, nosei, suzhou, makayama and huaibei provinces, as well as to cities in beijing, xi'an, chengdu, guilin and harbin。
It is not difficult to see that the facilitation of off-site car purchases will facilitate the dynamism of off-site transactions and lead to a sustained increase in the size of second-hand car transactions。
The data show that the proportion of exotic traffic on melon platforms has risen from 35 per cent to 80 per cent. On 1 june, the policy of removing the country's five second-hand vehicles was implemented in hebei, jiangsu, tianjin, zhejiang and guangdong. Users in these cities will expand the range of options for second-hand vehicles by about six times and the range of options for purchasing vehicles will continue to increase sales and shelf volumes thereafter。
“we will also use the platform advantage of a network of electricians covering the entire country to actively assist in the landing of the temporary number card policy, to assist platform operators to improve their time limits, to improve user experience in purchasing cars, to make used cars more easily and efficiently traded online, and to make more consumers willing to buy high-priced used vehicles online, and to better promote the national circulation of used vehicles.” wang xiao woo said。
There is no doubt that automobiles are the backbone of the national economy and an important driver of consumption. This meeting of the standing committee of the state council will accelerate the effective implementation of the relevant policy and further increase the consumption of cars。
The deputy secretary-general of the chinese automotive industry association, chen shihua, stated that there had been an improvement in the movement of personnel, logistics transport and supply of goods to automobile enterprises across the country, and that there had been a gradual opening of the vehicle supply chain and industrial chain and a marked acceleration of the resumption of work。
“the situation with respect to automobile sales is expected to continue to improve in june, as many consumption-promoting policies develop.” chen shihua said。
