In the first four months of the recovery of the passenger car market and the commercial vehicle market, the "overwhelming power" has prompted the relevant departments to "resolve decisively." In mid-May, the State Council's executive meeting further researched and implemented policies to encourage car “renewal” and decided to expand the subsidy scope and increase subsidies on the basis of the original old car retirement subsidies policy. At the same time, the retirement subsidies for old cars were increased from the previous one billion yuan to five billion yuan. Last week, the relevant person in charge of the National Development and Reform Commission once again elaborated on the “New Deal” of the automobile. Encouraged by this policy, several domestic securities research institutions recently released an analysis report saying that they are more optimistic about the profit prospects of listed commercial vehicle companies during the year.

"New Deal" New Deal Increases Subsidy

In the first four months of this year, domestic production and sales of motor vehicles were 3,824,800 and 3,831,900, an increase of 6.40% and 9.43% respectively. Among them, the production and sales of passenger cars were 2,692,900 and 2,826,700, representing a year-on-year increase of 9.75% and a 15.09% increase. However, on the other hand, in the commercial vehicle market, 1,319,900 vehicles and 1,050,200 vehicles were produced and sold, representing a “double drop” of 1.46% and 3.86% year-on-year.

It is to see the passive situation of the commercial vehicle market in the overall recovery of the industry, the relevant departments to quickly take action. In mid-May, the new policy of encouraging the replacement of cars with "new-for-new" subsidies was introduced.

Last week, the relevant person in charge of the National Development and Reform Commission made further explanations for the new car “renewal” policy. Except for the subsidy for exchanging the original agricultural vehicle for the light truck, the medium-, light-, micro-duty trucks and some medium-size passenger vehicles that meet certain service life requirements, and the “yellow-marked vehicles” are scrapped in advance and replaced with new ones. Give subsidies of no more than the purchase tax for single vehicles of the same type, which is 6,000 yuan for medium-sized trucks, 5,000 yuan for light-duty trucks, 4,000 yuan for micro-loaded trucks, 5,000 yuan for medium-sized passenger vehicles, and 4,000 yuan for light-duty trucks, and micro Car passenger car 3000 yuan, other models 6000 yuan.

The new policy is more inclined to commercial vehicles

In response to the new “old-for-new” subsidy policy, China Merchants Securities said that this policy is a further supplement to the consumption stimulus policies of commercial vehicles, reflecting the country’s intention to balance the development of the auto industry.

“The automobile industry adjustment and revitalization plan announced in February this year will increase the total amount of subsidies for the retirement of old cars in 2009 from RMB 600 million last year to RMB 1 billion, and the latest subsidy policy will increase the subsidy scale to RMB 5 billion. There is a significant increase in the number of subsidized vehicles that can be enjoyed." "Pollution vehicles in the subsidy range that fail to meet the national I standards and diesel vehicles that do not meet the national III standard, the so-called yellow standard vehicles, contain a large number of low-emission heavy-duty trucks, medium and large passenger vehicles, plus For light and micro trucks and some mid-size passenger vehicles, the new vehicle replacement policy actually covers all commercial vehicle products,” said CITIC Securities.

In addition to the significant increase in the scope of subsidies, the subsidies for “replacement of old cars” for the purchase of commercial vehicles have also greatly increased. CITIC Securities stated that in the "Old Vehicle Subsidy Standards" issued by the Ministry of Finance on April 22 this year, scrapped light passengers, passengers, heavy trucks and other models can only receive fixed subsidies ranging from 5,000 yuan to 15,000 yuan, but according to the new The subsidy policy, if the old cars are scrapped and new cars are purchased at the same time, an average of 20,000 to 30,000 yuan (10% of the vehicle price) will be subsidized.

Heavy truck products or become the biggest beneficiaries

Among all commercial vehicles, heavy truck products have become the biggest beneficiaries of swap subsidies. First, the life cycle of heavy trucks is relatively short (usually 4 to 6 years), and the proportion of normal scrapping is high each year. Second, there are a large number of low-emissions or near-end-of-life vehicles in heavy trucks. Thirdly, the amount of subsidy for heavy-duty bicycles is higher, and it is expected to increase from 5,000 yuan in the original policy to 20,000 to 30,000 yuan, which will help stimulate demand release. At the same time, due to the recovery of the logistics transportation market and the increase in demand driven by project construction, it will also provide a basis for the release of demand for heavy trucks.

The relevant analysts said that the introduction of this subsidy policy will bring more trading opportunities to the relevant commercial vehicle listed companies. The medium and heavy trucks and large and medium-sized bus markets may benefit the most, including Weichai Power, Yutong Bus, and China National Heavy Duty Truck. The investment prospects of Foton, Foton Motors, Jiangling Motors, Jianghuai Auto, and Jinlong Automobile are promising.
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