Policies released to stimulate auto market recovery

Faced with sales severely affected by the novel coronavirus outbreak, The Chinese government launched multiple favorable policies to stabilize automobile sector and accelerate the market recovery, according to The Economic Observer.

Local governments has been encouraged to put forward incentive measures for auto industry, including subsidizing new energy vehicle buyers, loosening vehicle purchase restrictions and introducing auto replacement scheme.

Nanchang, in eastern Jiangxi province, released guideline on March 25 that buyers will be subsidized by 1,000 yuan per car for purchasing new vehicles in the city during the epidemic period.

Guangzhou government will also offer 10,000 yuan subsidy to new energy vehicle buyers. For consumers trading in second-hand cars, or purchasing new cars in compliance with the "China VI" vehicle emission standards, each will get 3,000 yuan subsidy.

Ningbo, in Zhejiang province, announced that from March 25 to Sept 30, buyers can enjoy a 5,000 yuan discount for purchasing local-produced passenger vehicles.

Besides, the capital city of Zhejiang, Hangzhou authority decided to further increase the number of new car plates, with 20,000 quotas available to buyers in 2020.

As of today, at least nine cities in five provinces across the country have introduced policies to stimulate automobiles consumption.

Automobile industry was seriously stricken by the virus outbreak in the first two month of 2020, with sales volume reaching 2.24 million unites, dropping 42 percent from the previous year. In February, the sales declined 83.9 percent year-on-year, with only 310,000 vehicles sold, according to the statistics from China Association of Automobile Manufactures.

However, based on Citic Securities' estimation, as stimulating policies are gradually rolled out from key capital cities to all over the country, it is expected to add auto consumption of 390.6 billion to 802.4 billion yuan, accounting for about 9.9 to 20.4 percent of the retail sales in 2019.