Beijing Launches Policies to Stimulate Vehicle Market

On July 7, the Chinese Ministry of Commerce and other 16 government departments issued a notice to introduce several measures to help stimulate and expand the automobile market, particularly consumer buying. The notice targeted six different areas and focused on twelve different policies.

The newly proposed measures involve stimulating the consumption of new cars while also making several points on the requirements for the whole life cycle consumption of used cars, such as car recycling and scrapping.

Regarding the promotion of the purchase and use of new energy vehicles, the Measures, as the document is being called, proposed to promote free-flow of NEVs across regions and to break the local protection of NEV market. Further, the doccument will extend the vehicle purchase tax exemption policy for NEVs after its expiration and will carry out in-depth activities for NEVs in the countryside. Finally, the document aims to support the construction of charging facilities throughout the country.

Guo Shougang, a person in charge of the First Equipment Industry Department of the Ministry of Industry and Information Technology, said MIIT and other relevant departments would expand the scale of the promotion of new energy vehicles, improve vehicle supply and help stabilize the prices of automotive chips and upstream raw materials. The agencies will also make every effort to ensure the smooth and stable supply chain of the industry chain.

In promoting the development of used cars, the Measures requires the full abolition of the relocation restriction policy and, instead, promotes the free circulation of used vehicles. The Measures also aim to optimize transaction registration management and promote efficient circulation while supporting the development of dealership businesses and promoting the scale of development.

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In promoting the consumption of automotive renewal, the Measures encourages the acceleration of the phase-out and renewal of aged vehicles, improve the recycling system of end-of-life motor vehicles, etc.

To address urban parking issues, the Measures proposed to promote the construction of urban parking facilities, effectively improve the effective level of urban parking facilities supply, accelerate the application of new technologies and new models to promote the sharing of parking resources and matching supply and demand. New residential areas are built in strict accordance with urban parking planning and complete residential community construction standards for the construction of parking facilities.

The automobile industry is considered an important strategic and pillar industry of the national economy. This year, Chinese authorities have repeatedly stepped up efforts to stabilize and increase automobile consumption through their policies. In April, the State Council issued a notice calling for increased consumption and proposed a series of measures to promote auto consumption such as relaxing auto purchase restrictions. In May, the State Council also issued a package of policy measures to help stabilize the economy, reduce vehicle purchase taxes on some passenger cars, and improve trading registration requirements for used cars.