Reduction of purchase tax and return to auto market for three times is expected to "return blood"
On May 31, the Ministry of Finance and the State Administration of Taxation officially announced that from June 1 to December 31, 2022, the vehicle purchase tax (passenger vehicles with a displacement of 2.0 liters and below) will be halved.
After a lapse of many years, the policy of reducing purchase tax has once again reappeared when the auto market is in the doldrums. Netizens lamented, "I saw the hope of buying a car", "Thanks to the motherland, and I can give a lot of money", "I regret buying a car early"... …
So, can the policy of reducing vehicle purchase tax for the third return succeed in saving the sluggish auto market like the previous two?
Market continues to slump
Urgent need for "rescue"
Looking back at recent car sales, there are signs of a downturn in the market.
Beijing Youth Daily learned from the China Association of Automobile Manufacturers that in 2021, the cumulative total sales of vehicles will be 26.27 million, with a cumulative growth rate of 3.8%, and finally achieve positive growth, which is higher than the performance in 2019.
However, the total retail sales of consumer goods in 2021 (44,082.3 billion yuan) will increase by 12.5% year-on-year.
The National Bureau of Statistics specially added a "retail sales of social consumer goods (39,703.7 billion yuan) excluding automobiles, an increase of 12.9%" in the "Main Data on Total Retail Sales of Consumer Goods".
This means that the retail sales of automobiles dragged down the total retail sales of consumer goods in the whole society, causing the total retail sales of consumer goods to slow down by 0.4 percentage points year-on-year.
Among them, the retail sales of auto commodities in 2021 will be 4,378.7 billion yuan, an annual increase of 7.6%.
So what is the reason that affects the growth rate of total retail sales of social consumer goods?
The problem lies in the reduction in auto retail sales in the five months from August to December, which were all negative year-on-year growth.
It can be seen that the quality of auto retail sales has a decisive impact on the total retail sales of social consumer goods.
Beiqing Daily learned from the China Association of Automobile Manufacturers that automobile production and sales in 2021 will show a year-on-year increase, ending the three consecutive years of decline since 2018.
It is worth mentioning that in 2019, the cumulative total sales volume of automobiles was 25.7687 million units, with a cumulative growth rate of 8.1%;
In 2019-2020, the growth rate has declined for two consecutive years.
Since the beginning of this year, the situation of the automobile market has become increasingly severe.
The cumulative total car sales in the first quarter of this year was 6.4925 million units, an increase of 0.2% over the same period last year. Among them, the cumulative retail sales of the national passenger car market in the first quarter were 4.915 million units, a year-on-year decrease of 4.5%, and the overall trend was lower than expected.
The sales volume of traditional fuel vehicles was 3.85 million, a year-on-year decrease of 18%, and the domestic retail sales of new energy vehicles was 1.070 million, a year-on-year increase of 146.6%, showing a K-shaped trend of sales of traditional fuel vehicles and new energy vehicles.
In April, automobile production and sales reached 1.205 million and 1.181 million respectively, down 46.2% and 47.1% month-on-month, and 46.1% and 47.6% year-on-year, respectively. The production and sales of automobiles showed a significant decline, which was a new monthly low for the same period in the past 10 years.
The China Association of Automobile Manufacturers calculates based on the weekly report data reported by key enterprises, in May 2022, the sales volume of the automobile industry is expected to complete 1,766,500 units, a month-on-month increase of 49.59% and a year-on-year decrease of 17.06%; from January to May 2022, the sales volume is expected to complete 9,457,300 units , down 13.11% year-on-year.
According to the forecast, the sales volume in May will be significantly better than that in April this year, but compared with the same period last year, the sales volume is still down, and the market vitality still needs to be further restored.
Tax cut policy appeared three times
When car sales are in the doldrums, the auto market often expects a policy bailout.
Such is the first appearance of the purchase tax reduction policy.
In 2008, the subprime mortgage crisis triggered by the United States triggered a storm on Wall Street, which evolved into a global financial crisis in a short period of time.
Under the impact of the international financial crisis, the global auto market is facing a severe situation, and my country's auto market is also affected by the international environment.
In order to revitalize the sales of the automobile industry, in 2009, the Ministry of Finance and the State Administration of Taxation issued the "Notice on Reducing Vehicle Purchase Tax for Passenger Vehicles with Displacement of 1.6 liters and below", reducing the vehicle purchase tax rate for some passenger vehicles.
From January 20, 2009 to December 31, 2009, passenger cars with a displacement of 1.6 liters and below are temporarily reduced to 5% vehicle purchase tax.
Since then, in order to expand domestic demand and promote the healthy development of the automobile industry, with the approval of the State Council, the vehicle purchase tax will be temporarily reduced at a rate of 7.5% for the purchase of passenger vehicles with a displacement of 1.6 liters and below from January 1 to December 31, 2010.
The introduction of the tax reduction policy is of great significance for cultivating the automobile consumption market, effectively stimulating automobile consumption, expanding domestic demand, and promoting the stable and rapid development of the automobile industry.
In 2009 and 2010, China's passenger car sales were 10.3313 million and 13.7578 million, up 52.93% and 33.17% respectively.
In 2015, China's auto market was sluggish again, passenger car sales continued to decline, and market pressure continued to rise.
On September 29, 2015, the Ministry of Finance and the State Administration of Taxation issued the "Notice on the Reduction of Vehicle Purchase Tax for Passenger Vehicles with Displacement of 1.6 liters and Below".
The notice stated that from October 1, 2015 to December 31, 2016, the vehicle purchase tax will be temporarily reduced at a rate of 5% for the purchase of passenger vehicles with a displacement of 1.6 liters and below.
Since then, when the policy of reducing the purchase tax for passenger cars is about to expire, the Ministry of Finance and the State Administration of Taxation issued the "Reduction of the purchase tax for passenger cars with a displacement of 1.6 liters and below" on December 13, 2016. announcement of".
The notice stated that from January 1, 2017 to December 31, the vehicle purchase tax will be temporarily reduced at a rate of 7.5% for the purchase of passenger cars with a displacement of 1.6 liters and below.
From January 1, 2018, the vehicle purchase tax will be resumed at the statutory tax rate of 10%.
Relevant data show that, stimulated by the policy of reducing vehicle purchase tax, the sales volume of passenger vehicles in China reached 21.1463 million units in the fourth quarter of 2015, a year-on-year increase of 7.3%, and exceeded the 20 million unit mark for the first time.
In 2016 and 2017, the sales of passenger vehicles in China were 24.377 million and 24.7183 million, up 15.28% and 1.4% year-on-year.
In April of this year, car sales fell off a cliff, and the state took another shot. On May 31, the Ministry of Finance and the State Administration of Taxation issued the "Announcement on Reducing the Purchase Tax for Some Passenger Vehicles".
In order to promote automobile consumption and support the development of the automobile industry, 2.0 liters and below with a purchase date between June 1, 2022 and December 31, 2022 and the price of a bicycle (excluding VAT) does not exceed 300,000 yuan. For passenger cars, the vehicle purchase tax will be halved.
Compared with the previous two tax reduction policies, both of which focused on 1.6-liter and below-displacement passenger cars priced below 200,000 yuan, this tax reduction policy has benefited 2.0-liter and below-displacement passenger cars not exceeding 300,000 yuan for the first time. Using a car directly expands the scope of tax reduction.
So, what will be the effect of its rescue?
Fu Yuwu, honorary chairman of the Society of Automotive Engineers of China, told the Beijing Youth Daily that in 2009 and 2015, the government introduced timely policies to reduce purchase tax, which played a major role in promoting and greatly improved market performance.
The favorable policies stimulated the purchasing power of low-income groups, and the sales of economical cars increased rapidly, which promoted the continuous improvement of the economical car market. The introduction of the two purchase tax policies played a major role in promoting.
However, the current situation is more complex and severe than ever.
The epidemic lasted for nearly 3 months, causing a heavy blow to the development of the auto industry.
In addition, the income performance of small, medium and micro enterprises and low-income people has been poor in the past two years, and their purchasing power has been greatly curbed, which directly affects the decline of the economical automobile market.
The introduction of halving the acquisition and purchase tax can play an important role in promoting consumption. It is hoped that the policy will be implemented as soon as possible to promote market recovery.
The capital market responded enthusiastically
In fact, when the tax cut policy is about to come out, the capital market with a keen sense of smell has already made positive feedback.
On May 23, the news of the relaxation of car purchase restrictions and a phased reduction of 60 billion yuan in purchase tax for some passenger cars was released. On May 24, the stock price of the auto sector ushered in an overall surge.
Great Wall Motors rose more than 13%, Geely Automobile rose nearly 10%, GAC Group rose nearly 6%, and Wuling Motors rose more than 3%.
Changan Automobile, SAIC Group, Dongfeng Motor, Haima Automobile, etc. rose to varying degrees.
Within half an hour of the opening bell, the entire automaking sector rose 2.9%.
It is worth mentioning that within 30 minutes of the opening, new energy vehicle stocks fell slightly.
Among them, BYD's biggest drop was 3.2%, and BAIC Blue Valley's biggest drop was more than 1%.
In addition, CATL, a leading power battery stock, fell by more than 2%.
Fu Yuwu, honorary chairman of the Society of Automotive Engineers of China, told the Beijing Youth Daily: Recently, the penetration rate of the new energy vehicle market has reached 25.3%, indicating that the fuel vehicle market still accounts for a relatively high proportion.
From an overall perspective, the introduction of the policy of halving the vehicle purchase tax will greatly promote both traditional fuel vehicles and new energy vehicles, and can stimulate the purchasing power of the consumer side of the market.
Entering the market promotion stage, the introduction of favorable policies can help the auto industry to get through a difficult and special period.
In the low-end automobile market, due to multiple factors such as rising raw material costs and rising prices of upstream manufacturers, the enthusiasm for production has declined, and the industry situation is grim.
At this stage, it is necessary to introduce strong policies from both sides of supply and demand to help the auto industry get out of the predicament and tide over the difficulties.
Take advantage of policy
Auto companies expand the scope of tax reduction
Shortly after the introduction of the policy of halving the vehicle purchase tax on automobiles, car companies have actively responded to the policy call and joined the "big car purchase subsidy" activity.
Dongfeng Nissan announced that all models will be exempted from purchase tax and will be offered full insurance within a limited time; there is no threshold for car purchases, and all models will be deferred loan financial products, and there is no need to repay the principal in the first three months; preferential services such as deferred repayment.
Beiqing Daily noticed that if you buy all Venucia models now, you can participate in 2-year 0-interest limited-time financial activities, and manufacturers can discount up to 5,000 yuan.
You can also participate in the "888 yuan loan to go home" or "999 yuan low monthly payment"; the old car is replaced by all Venucia models, and you can enjoy a replacement subsidy of up to 9,000 yuan for a limited time while superimposing the use of financial policies.
Chery announced the activities to enjoy full purchase tax subsidy and 5,000 yuan car subsidy for car purchases; Changan Automobile announced that on the basis of halving the vehicle purchase tax, there will be additional discounts, and some models will enjoy "full purchase tax exemption" or "" Up to 120% discount”; Dongfeng Fengshen announced the launch of the theme preferential policy of “Sincerely One Billion Fengshen Plus Code”.
From June 1st to December 31st this year, all models of Dongfeng Fengshen on sale provide a special policy of "0 purchase tax"; Great Wall Haval announced the launch of the "Tax Reduction Really Powerful Haval Profits" campaign, any purchase of Haval's The users of the car models can additionally enjoy a 3,000-yuan car-purchase package, which includes 1,000 yuan of commercial insurance + 2,000 yuan of boutique or maintenance coupons, and enjoy 0 down payment and 0 interest. Financial courtesy and door-to-door test drive service .
For replacement users, Haval has launched an overweight replacement benefit of up to 11,000 yuan.
FAW Bestune officially announced that from now on, if you purchase all its products, you can enjoy full purchase tax reduction and free commercial insurance. Among them, Bestune B70, Bestune T77, and Bestune T99 can enjoy full commercial insurance exemption, and the maximum amount of reduction is over 10,000 yuan. Yuan.
The down payment for car purchase is only 888 yuan, and the monthly payment is only 1000+.
Up to 16,000 yuan subsidy for replacement car purchases.
After the introduction of the policy of halving the acquisition and purchase tax, more than 20 car companies including Volvo, Dongfeng Honda, Changan Mazda, etc. have successively issued preferential policies to increase the profits of car consumption, setting off this year's "car buying fever", and June may usher in Best sales of the year.
In addition to the stimulus consumption policies of auto companies, local governments have also issued "gift packages" for auto consumption to boost the recovery of the industry.
Shenzhen issued "Several Measures for Promoting the Continued Recovery of Consumption".
For individual consumers who newly purchase eligible new energy vehicles and are licensed in Shenzhen, Shenzhen will provide subsidies of up to 10,000 yuan per vehicle.
Yiwu City, Zhejiang Province recently launched the 2022 automobile consumption promotion activity.
The activity starts from May 15, 2022 to June 15, 2022, and each car buyer can enjoy 1 car purchase subsidy during the policy period.
Qingdao City will launch the issuance of auto consumption coupons in the near future. From May 21 to October 31 this year, consumption activities will be carried out across the city.
Among them, when buying a car, you can enjoy a one-time subsidy of 3,000 to 10,000 yuan according to different price points of different models.
From May 21 to September 21, Changchun City will carry out the 2022 Changchun City Automobile Consumption Subsidy Campaign, which will distribute 50 million automobile consumption subsidies to individual consumers who purchase cars in Changchun City.
The Beijing Youth Daily found that since the beginning of this year, nearly 20 provinces and cities have introduced auto market-related stimulus policies to encourage auto consumption.
Coin holders waiting to buy
ready to enter
Beiqing Daily roughly estimates that, taking a model with a unit price of 150,000 yuan (excluding VAT) as an example, the purchase tax can be reduced from 15,000 yuan to 7,500 yuan, saving about 7,500 yuan.
If you buy a model of 300,000 yuan (excluding VAT), the purchase tax will be reduced from 30,000 yuan to 15,000 yuan, saving about 15,000 yuan.
The policy has just been introduced, and there are already consumers ready to take action.
Mr. Yang, who originally planned to buy a car recently, told the Beiqing Daily: I heard that the price of raw materials for automobile production has increased recently, and the price of the car that I originally liked has started to rise one after another, so that I don't plan to buy another car in the near future.
However, the halving of vehicle purchase tax on car purchases and the preferential subsidies for car purchases have been introduced locally. With the support of the double favorable policies, it may be able to hedge the purchase pressure caused by the increase in car prices to a certain extent.
In the near future, the cost of purchasing a car will be converted into a new energy vehicle of your choice.
Mr. Zhang, who was looking at the car in the Geely 4S store, told Beiqing Daily that he was going to buy a 2021 Geely Xingyue L 2021 two-wheel-drive flagship car with a price of about 165,200 yuan. 16,500 yuan. After the introduction of the policy of halving the car purchase tax, only 8,200 yuan needs to be paid.
The landing price of a new car saves the cost of rigid expenses such as insurance and decoration, which is very cost-effective.
Xu Huxiong, a partner at Roland Berger, told the Beiqing Daily: The halving of vehicle purchase tax is one of the important measures for both car companies and consumers to achieve mutual benefit and win-win results and macro-control of the market. Relieve production and sales pressure.
When the market needs to boost consumption, some control measures can play an important role in promoting automobile consumption.
From the perspective of the entire auto market, when the effect of boosting consumption is fully manifested and market vitality recovers, market stimulus measures can be reduced or eliminated.
From the perspective of consumers, car companies are announcing price increases recently, and adjusting the market by halving the vehicle purchase tax policy can effectively stimulate car consumption.
With the gradual increase in the cost performance of automobiles, the market supply is more and more able to meet the diversified car buying needs of consumers, and the terminal price of automobiles is still within an acceptable range.
Through the continuous efforts of the auto companies' own supply and demand ends and the policy of halving the vehicle purchase tax, the overall auto market will remain positive and truly guide the auto market to continue to move forward.
The same is true of consumers. Now Chinese consumers are becoming more and more rational.
As the cost continues to rise, consumers can also rationally view the increase in the transaction price of automobiles due to objective reasons. As long as the price increase of automobiles is still within the rational increase space, consumers will still choose to buy a car.
tax cuts are
Is it the ultimate weapon to save the market?
Whenever the auto market continues to decline, tax cuts fall from the sky like superheroes, leading auto companies out of the slump.
Will this make the market and enterprises suffer from "tax reduction policy dependence"?
Professionals believe that in the downturn in the industry, in order to get out of the predicament, in addition to policy support, it is necessary to take multiple measures and work together.
Fu Yuwu, honorary chairman of the Society of Automotive Engineers of China, told the Beijing Youth Daily: From the perspective of automobile production, due to the recent recurrence of the epidemic, the Russian-Ukrainian war and other factors, the automobile industry has been impacted, with a poor supply chain, chip shortages, and rising raw material costs. Such problems have led to greater challenges in the production process.
Only by stabilizing production and ensuring supply can the lifeline of industrial development be stabilized.
Recently, prices in metallurgy, petroleum, chemical and other fields have fluctuated greatly, driving upstream automakers to continuously increase prices and increasing the cost of the entire automobile production chain.
On the one hand, suppliers need to try their best to control production costs and provide consumers with more cost-effective products.
On the other hand, the government should introduce relevant measures to curb abnormal cost increases in the market and help auto manufacturing return to a rational price range.
From the perspective of consumption, there are many consumers of economical automobiles in the low-end market in my country, and the consumption market of economical automobiles is huge.
Special measures should be used in special times. From the introduction of halving the vehicle purchase tax to the introduction of car purchase subsidies by local governments, they can all play a vital role in stimulating automobile consumption, boosting industrial confidence, and helping the industry recover.
In a sense, through the joint efforts of all sectors of society, the vitality of the auto industry will be released, and the economic development will have a better performance.
In a short period of time, it will stimulate market vitality and boost consumer confidence, which will play a role in promoting twice the result with half the effort.
Xu Huxiong, a partner at Roland Berger, told the Beijing Youth Daily: Reducing the car purchase tax is related to the auto market and even the entire economic environment. Car companies not only need to reduce or exempt the purchase tax to increase market sales, but also restore the supply chain capacity as soon as possible to achieve self-help , stabilize the market situation.
Since the outbreak of the epidemic in 2020, many car companies have made numerous efforts to stabilize their supply chains.
For example, car companies independently develop new supply chain systems, combine multiple means to strengthen strategic cooperation with core parts suppliers, and form strategic layouts; further reduce production costs by improving production technology and production efficiency.
On the other hand, combined with the market macro-policy regulation, the two-pronged approach will work together to promote the cyclical and iterative sustainable and healthy development of the auto industry.
On the car sales side, it is necessary to adopt a variety of marketing methods to increase consumers' interest in car purchases.
When offline car purchases are blocked, marketing strategies should be adjusted in a timely manner, and online marketing methods should be used to promote consumption.
In addition, it is necessary to listen to consumers' demands in a timely manner, integrate real and practical functions into their own product design, and create more modern and intelligent vehicles.
In addition, it is necessary to solve the problems in products and services reported by users in a timely manner, and examine product and brand issues from the perspective of production, supply, and sales, so as to enhance the competitive space advantage of car companies, and increase production capacity and brand value.
Text / Zhou Jing