On May 23, according to the news report of China Central Television, the executive meeting of the State Council was held a few days ago to further deploy a package of measures to stabilize the economy, strive to promote the economy to return to the normal track and ensure that it operates within a reasonable range. The meeting pointed out that 33 measures were implemented in six aspects, including fiscal and related policies, financial policies, stabilizing the industrial chain and supply chain, promoting consumption and effective investment, ensuring energy security, doing a good job in unemployment security, subsistence allowances and assistance to people in need.
Among them, in terms of promoting consumption and effective investment, it is proposed to reduce the purchase tax of some passenger cars by 60 billion yuan. On May 23, Cui Dongshu, Secretary General of the national passenger car market information joint committee, said in an interview with the reporter of the daily economic news: “this policy will strongly stimulate automobile consumption.”
Since late March 2022, affected by the epidemic, Changchun and Shanghai, the two core bases of automobile industry, have been forced to fall into a standstill in the industrial chain, resulting in a sharp decline in automobile production and sales in April, and China’s automobile industry is facing severe challenges again.
According to the data of the passenger Federation, the sales volume of passenger cars in China in April was 1043000, a year-on-year decrease of 35.5% and a month on month decrease of 34%, which is the lowest monthly sales volume in China’s auto market in recent ten years. In May, car sales remained dismal. According to the data of the passenger Federation, from May 1 to 15, the retail sales of passenger cars in the national passenger car market was 484000, a decrease of 21% over the same period last year; Passenger car manufacturers nationwide wholesale 458000 vehicles, down 24% from the same period last year.
Auto production and sales fell, but the share prices of listed auto companies rose sharply a few days ago. On May 23, the major indexes rebounded from the bottom, and the Shanghai Composite Index rose slightly. More than 3500 stocks in the two cities rose and more than 100 stocks rose. In terms of sectors, the automobile related sectors continued to perform actively. As of the closing on May 23, the index of the whole automobile sector rose by more than 4%, and Anhui Ankai Automobile Co.Ltd(000868) , Zhongtong Bus Co.Ltd(000957) , Yangzhou Yaxingmotor Coach Co.Ltd(600213) , Jianghuai bus rose by the limit, of which Zhongtong Bus Co.Ltd(000957) successfully promoted to the seventh consecutive board. In addition, new energy vehicle stocks staged a trading tide, with more than 20 stocks trading, and auto parts and other sectors also rose.
In fact, the auto related sector has continued to strengthen recently. According to the rise and fall of nearly 10 trading days, as of the close of May 23, the index of the whole vehicle sector has increased by 26.1%, and the cumulative increase of the indexes of auto parts and new energy vehicles has also reached 15.2% and 14.1% respectively.
The recent collective outbreak of auto stocks, on the one hand, benefited from the gradual improvement of the impact of the epidemic and the rapid promotion of the resumption of work and production of the industrial chain, resulting in the reversal of difficulties; On the other hand, the policy stimulus also supports the automobile consumption after the epidemic.
At present, many places have announced automobile consumption promotion policies. Changchun City has issued a total of 50 million yuan of automobile consumption subsidies to individual consumers who buy cars in the city; Qingdao has issued a policy that consumers can enjoy a one-time subsidy of 30 ~ 10000 yuan according to different models and different prices when buying cars; Shenzhen and other places have also successively implemented automobile consumption stimulus policies.
According to Cui Dongshu, at present, the automobile industry is facing difficult challenges. The industry and enterprises are trying to promote the recovery of consumption, and all sides have also put forward a lot of policy suggestions. At present, the main measures to stimulate automobile consumption include: 1. Reduction and exemption of purchase tax; 2. Individual income tax offset for car purchase; 3. Trade in old for new; 4. Issue consumption coupons; 5. Licence relaxation; 6. Automobile to the countryside; 7. Continuation of subsidies for new energy vehicles; 8. Used car commodity attributes; 9. Auto finance, etc.
Stimulated by the policy, many research institutions believe that China’s automobile production and sales are expected to make up for it next. According to the research report released by Wanlian securities on May 23, due to the impact of the epidemic and changes in local management measures on logistics efficiency, the automobile industry is under pressure in the short term. However, with the mitigation of the epidemic and the resumption of production, it is expected that the production and sales volume of the industry is expected to make up, superimposed with the introduction of local policies to stimulate automobile consumption and the decline of shipping costs, the performance of the industry is expected to rebound.
