The State Council executive meeting decided to adopt a financial subsidy method to further encourage the “renewal of old cars”: for medium-, light-, micro-duty trucks and some mid-size passenger vehicles that meet certain service age requirements, they should be scrapped in advance and replaced with new ones, or they should be ahead of schedule. Scrapped pollutants that do not meet the national I standard for petrol vehicles and diesel vehicles that fail to meet the national III standard, and convert to new ones, are in principle subsidized at a rate not higher than the single vehicle purchase tax for the same type. The meeting decided that this year the central government will scrap the old autos to update the subsidy funds from the one billion yuan at the beginning of the year to 5 billion yuan.

What is the current reality of China's auto consumption market? Stimulated by the previous policy of expanding domestic demand, the market for small displacement passenger cars of 1.6 liters and below, including microlitre passenger cars with a displacement of 1.3 liters or less, showed signs of recovery; however, the negative growth of commercial vehicle production and sales has not yet Effectively curbed, the production and sales of commercial vehicles fell by 1.31% and 4.53% respectively in April. From January to April, cumulative production and sales decreased by 1.46% and 3.86% respectively year-on-year. At the same time, the situation of auto exports is still very severe, with the total vehicle export falling by 60.80 percentage points from January to April. The beneficiaries of this old automobile scrapping and renewing subsidy policy are mainly concentrated on medium- and light-duty trucks and some medium-sized passenger vehicles. The target is particularly clear, and the target is particularly strong, hoping to reverse the current decline in the commercial vehicle market. Use the means to expand domestic sales to make up for export declines. We have reason to believe that the commercial vehicle market is expected to stop falling steadily in the second half of the year.

Automobile exhaust has become the main source of pollution in China's urban atmosphere, which seriously jeopardizes people's health. According to information released by the Ministry of Public Security in early April, as of the end of March this year, China’s car ownership amounted to 68.89 million vehicles. Even if 13.3544 million three-wheeled vehicles and low-speed trucks were removed, it was estimated that there were nearly 1,000 in 53.3757 million in-use vehicles. Emissions of 10,000 pollutants do not meet the National I standard petrol vehicles and diesel engines that do not meet the National III standard. There are 400,000 vehicles in this category in Beijing and 300,000 in Shanghai. Many provinces and cities including Beijing and Shanghai require the “Yellow Label Car” to exit the market as soon as possible; but we usually have only 300,000 scraps per year. -500,000 vehicles. The introduction of this subsidy policy will not only be conducive to the moderate and rapid redemption of the “Yellow Label Vehicle”, and will effectively promote the sales of new vehicles; it will also help reduce environmental pollution and promote the in-depth development of vehicle energy-saving and emission reduction.

This financial subsidy policy emphasizes the retirement of old cars. Of the 14 opinions previously formulated by the Ministry of Commerce, including 8 ministries, on the promotion of auto consumption, 3 were specifically written about the retirement of old cars, and their weight is still very heavy. Accelerate the development of modern automobile service industries, including automobile scrapping and recycling, and accelerate the establishment of a management system that integrates end-of-life vehicle recycling with safety, environmental protection, and resource reuse, and guides the upgrading and renovation of end-of-life vehicle recycling and dismantling enterprises. Encourage areas with conditions to set up centralized crushing centers for scrapped automobiles, and gradually resolve the conflict between broken crushing technology of scrapped cars, small scale, and low level, and support qualified recycling and dismantling enterprises to focus on technologies that focus on clean and environmentally friendly, safe production, and resource utilization. Transformation, promote industrial technological progress, and gradually form a virtuous cycle of old and new car scrapping update.

As the old cars are scrapped and renewed, or scrapped in advance and replaced with new ones, China’s car ownership will not have an explosive expansion due to this, and the growth of car ownership can be maintained within a moderately rapid range, and make car production possible. The product structure and the market structure of car sales can be adjusted scientifically and reasonably.