SCIO briefing on China's industrial and communications development in Q1
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E-mail China.org.cn, April 26, 2020
CNBC:
How did the new energy vehicles (NEVs) industry perform in the first quarter? And what are your expectations for the second quarter? Thank you!
Huang Libin:
Representing a significant pillar industry in China's national economy, the auto sector connects upstream and downstream industry chains and involves a wide range of sectors. The outbreak of COVID-19 has hit it severely. In the first quarter of this year, the output and sales volume stand at 3.474 million and 3.672 million, down 45.2% and 42.4% compared with a year earlier, respectively. Among them, sales of NEVs are hit heavier because the sector is still in the initial development stage. The output and sales volume of NEVs are 105,000 and 114,000, dropping 60.2% and 56.4% year-on-year respectively in the first quarter. Meanwhile, we should note that the output and sales volume dropped by 56.9% and 53.2% in March, respectively. The decline is narrowing compared with that in February, thanks to the effective pandemic prevention and control measures and the well-planned resumption of work and production.
Motivating consumer demand to spur auto sales is a fundamental policy in combating the impacts of the epidemic. In the early stage, the MIIT actively coordinated with relevant departments to develop policy proposals for stabilizing and expanding auto consumption, which were approved by the State Council executive meeting on March 31. These measures include: firstly, NEV purchase subsidy and vehicle purchase tax exemption policies will be extended for two years; secondly, the central government will replace subsidies with monetary rewards to support Beijing, Tianjin, Hebei and other key regions to phase out diesel trucks that only satisfy emission standards of China III and below; thirdly, the value-added tax on the sales of second-hand cars sold by second-hand car dealers is to be reduced to 0.5% of sales volume from May 1 this year to the end of 2023. Meanwhile, the MIIT encourages all localities to introduce measures to promote auto consumption market. Guangdong, Shandong, Jilin, Hainan, and Zhejiang provinces and Beijing, Shenzhen, Hangzhou, Ningbo, Nanchang, Guangzhou, Foshan, and other cities have officially issued specific measures. We believe more provinces and cities will follow suit. Auto output and sales volume will be restored and improved with the gradual release of consumption demand as well as the implementation of policies on expanding car spending.
In the next step, the MIIT will follow the arrangements made by the CPC Central Committee and the State Council in implementing related policies and measures and keeping a sustainable development of the automobile industry while ensuring powerful epidemic prevention and control, maintaining market order, and supporting work resumption. First, we will put into practice the requirements made at the State Council executive meeting to draft and issue specific policies and work to publicize notice and management of NEVs types and their subsidy and liquidation in coordination with the Ministry of Finance and other relevant ministries. Second, we will expedite the release of the New Energy Vehicle Industry Development Plan（2021-2035）and consolidate our efforts to achieve goals; meanwhile, we will work out a action plan on electrification of vehicles in public areas and give a boost to electrification level in buses, public sanitation patrol, post-delivery, taxies, commuting, light logistics distribution, and so on. Third, we will encourage the implementation of specific policies and measures to spur car sales in the related regions by offering electricity subsidies and convenient usage, as well as forming a complete vehicle set and expanding its application. Thank you!
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