Analects of Finance and Economics
Author: Wang Qing (Deputy Director and Researcher, Institute of Market Economy, the State Council Development Research Center)
Automobile is a large-scale and relatively high commodity in China’s consumption market, and it is also an important field for the continuous upgrading of residents’ consumption structure. To effectively expand and better release automobile consumption, we should grasp the new changes, trends and requirements in the automobile market, and speed up filling shortcomings, unblocking points and optimizing the environment.
At present, China’s automobile consumption has obviously accelerated, and there are many bright spots in market growth, which is the "highlight" of national and local consumption promotion. Driven by a number of policies, the automobile market has obviously warmed up. From January to October this year, a total of 23.97 million vehicles were sold, up 9% year-on-year, and the growth rate increased by 4.5 percentage points over the same period; The total retail sales of automobile products was 3.9 trillion yuan, accounting for 11.3% of the total retail sales.
At the same time, the upgrading trend of automobile consumption structure is obvious. Statistics show that the proportion of sales of models below 100,000 yuan continues to decrease, and the proportion of middle and high-priced models above 100,000 yuan continues to rise, especially luxury brand models above 300,000 yuan continue to sell well, with a year-on-year growth rate of over 30%. The consumption heat of new energy vehicles continues to climb. From January to October, a total of 7.28 million new energy vehicles were sold, up 37.8% year-on-year, accounting for more than 60% of the global sales in the same period. In October, the sales volume approached the million-vehicle mark, and China became the world’s largest new energy vehicle consumption market for eight consecutive years. Automobile exports continue to maintain a high growth trend. In the first 10 months of this year, China exported a total of 3.92 million vehicles, up 60% year-on-year, including about 1 million new energy vehicles, which doubled last year and is expected to become the world’s largest automobile exporter this year.
From the general law of automobile consumption in developed countries, there is generally an "S"-shaped change between the car ownership per thousand people and the per capita GDP, and there are three stages: introduction period, popularization period and maturity period. In the popularization period, it will experience two stages of high-speed and medium-speed growth, and the dividing point is about 100 cars per thousand people. After crossing the 100-vehicle mark in 2014, China’s automobile ownership has gradually turned to medium-speed growth, and has exceeded 200 vehicles in 2021. After turning to the medium-speed growth stage, the market increasingly presents two prominent characteristics: first, the potential growth rate of automobile demand, that is, the growth rate that potential demand can actually support, gradually falls back; Second, the main driving force to promote the growth of automobile consumption has shifted from the demand for first-time car purchase to the demand for upgrading. It is estimated that by 2030, China’s automobile market will still maintain a growth rate of about 3%, and in the past two or three years, it will be roughly at the level of 4%~5%, and automobile consumption still has great growth potential.
From the structural point of view, the structural change of automobile demand has begun to strengthen the supporting role of sales. The first is the replacement and update demand brought by consumption upgrading. At present, nearly 100 million private cars in China have reached or exceeded 6 years old, and they have entered a large-scale renewal cycle. Updating 1% every year can drive considerable sales. In 2022, about 60% of China’s automobile sales will be purchased or replaced. The second is the demand for new energy vehicles led by technological progress. The market share of new energy vehicles is 20% to 50%, which is the fastest growing stage. It is predicted that by 2025, the market share of new energy vehicles in China will reach 50% and the annual sales scale will reach 15 million. Third, the demand for cascade expansion supported by the rural market. From 2018 to 2022, the average number of family cars per 100 households in rural areas increased from 22.3 to 32.4, with an average annual growth rate of 12%, twice the growth rate of towns in the same period, and it is in the fastest stage of increasing the number of cars per 1,000 people. The fourth is the related consumption demand of automobile aftermarket expansion. The personalized and fashionable consumption of young consumers is rising day by day, and the demand for car modification and beauty is very strong, with great growth potential.
To effectively expand and better release automobile consumption, we must conform to the new characteristics and general trends of automobile consumption and market, speed up the filling of consumption shortcomings, unblock policy blockages, and optimize the market environment.
Actively promote the upgrading of old models. Combined with local policy experience, promote the adjustment and upgrading of automobile stock and stimulate incremental consumption. Appropriately increase the replacement subsidy and increase the reward for upgrading fuel vehicles to new energy vehicles. Promote the abolition of unreasonable restrictions on second-hand car transactions, further facilitate second-hand car transactions in different places, and promote the standardized and large-scale development of the second-hand car industry.
Continue to expand the consumption of new energy vehicles. Accelerate the planning and construction of charging facilities, and accelerate the charging facilities to enter communities, highways, scenic spots and public parking lots (parking spaces), effectively alleviating mileage anxiety and charging anxiety. Accelerate the research and development of related technologies and further reduce the cost of car purchase and car use.
Accelerate the activation of rural automobile consumption market. Improve rural roads, gas stations, charging stations and other infrastructure conditions, guide the sinking of automobile distribution and service networks, and realize the synergy of automobiles and services to the countryside. Promote the precise management of pickup trucks, and clarify regulations such as annual inspection, scrapping and high-speed charging.
Orderly release the market consumption demand after the automobile. Promote the standardized, transparent and efficient development of automobile parts circulation, promote the upgrading of automobile maintenance services, and accelerate the construction of new energy vehicle maintenance technical standard system. Build a multi-level automobile race pattern, orderly release consumer demand such as automobile beauty, and activate the aftermarket consumption potential of automobiles.
Focus on optimizing the automobile consumption policy and environment. Optimize the tax rate of automobile purchase tax and consumption tax, and effectively promote automobile echelon consumption. Strengthen the construction of urban smart transportation and create a good car environment. Strengthen comprehensive financial support for automobile consumption services.
Guangming Daily (15th edition, November 23rd, 2023)
Source: Guangming Net-Guangming Daily
