Discussion on the Progress of Differentiating Consumer Policies in China's Auto Market

Since last year, the growth of auto consumption has been sluggish. In 2011, due to factors such as the country’s macro-control, the withdrawal of consumer policies, the high base in 2010, and restrictions on purchases in cities such as Beijing, the growth rate of auto consumption has dropped significantly. According to statistics, in 2011, the national auto market sales reached 18.505 million vehicles, an increase of only 2.45% year-on-year, the lowest in 13 years, and the growth rate was down by 29.9 percentage points year-on-year.

"Expanding automobile consumption has important significance for maintaining growth, but it is necessary to adopt a differentiated automobile consumption policy based on actual conditions."

Beijing Beichen Yayuncun Automotive Trading Market Center held the 138th information meeting on June 12th. Zhao Ping, deputy director of the Consumer Economics Research Department of the Ministry of Commerce, stated that in view of the current domestic economic situation, expanding automobile consumption will curb consumption growth. The downward trend of the month and the guarantee of growth will have a strong supporting role. For the formulation of the future automobile consumption policy, Zhao Ping said: “The automobile consumption policy should focus on consistency and should be equal to both goods and services. In addition, the automobile is in the stage of rapid popularization in China, and the automobile policy in China should also be based on regions. Specific conditions for implementing differentiated policies."

Statistics show that from the perspective of the contribution of auto consumption to total social consumption, auto consumption has always accounted for more than 1/4 of the total retail sales of consumer goods. Even in 2011, when the growth rate of automobile sales reached a new low of 13 years, the retail sales of automobiles accounted for 26.66% of the total retail sales of social consumption.

Therefore, in Zhao Ping’s view, the lack of growth in auto consumption is one of the important reasons for the current lack of growth in total social consumption. The expansion of auto consumption will have a strong supporting role in curbing the trend of consumption growth falling month by month.

Then, what issues should the state pay attention to when formulating policies to expand automobile consumption?

“What is the policy objective of auto consumption? Is there a limit to the amount of auto ownership? What kind of policy should be adopted before reaching the upper limit? Is there an appropriate exit channel for obsolete old cars?” Zhao Ping asked the above question. She believes that these are things that the country must consider.

According to statistics, as of the end of August 2011, the number of motor vehicles in China reached 219 million vehicles, surpassing Japan, becoming the world’s second largest automobile ownership nation, slightly lower than the US’s 240 million vehicles in 2010. Among them, car ownership exceeded 100 million vehicles for the first time, accounting for 45.88% of the total number of motor vehicles, and became the main component of motor vehicles. Cars are in rapid adoption in China.

Zhao Ping said that China’s auto consumption policy should implement differentiated policies based on the specific conditions of each region.

For the eastern coastal cities, the development of public transport should be the main priority, and large purchases should not be encouraged, so as not to embark on the old road of Beijing—first purchase in large quantities, then limit the purchase and limit the purchase; at the same time, it should be appropriate according to the needs of external conditions such as traffic and environment. Limited purchases and restrictions on use.

For the central and western regions and the vast rural areas, because the per capita car ownership is too low, they should be encouraged to purchase and use cars in the short term, but in the long run, there should also be strategic arrangements.

“For example, to make timely adjustments in urban planning, construction, and function layout, try not to let everyone go to the same place at the same time, avoid congestion caused by improper urban planning layout, improve the efficiency of car use, and truly make consumption. Because of the purchase of cars, they will raise their living welfare levels." Zhao Ping suggested.