Environmentally-friendly upgrades key strategy to boosting auto sales

Source: Xinhua | 2019-01-30

LIFTING automobile sales is a major part of the policy of securing stable consumption growth.

The drop in auto sales last year — the first in two decades — contributed to about two thirds of last year’s total retail sale decrease in the country, said NDRC inspector Liu Yunan. In terms of the number of passenger vehicles per capita, China still has growth potential in the coming years.

“Phasing out outdated models and providing subsidies for environmentally friendly new energy vehicles would prove to be win-win for environmental protection as well as the boosting of consumption,” Liu said.

Encouraging rural residents to trade up their trucks and subsidizing rural auto consumption is also a major part of the action plan.

The Ministry of Industry and Information Technology’s deputy head of the information and software services department, Dong Dajian, said the ministry would also push forward the upgrade of the auto industry.

It would promote new energy vehicles and smart vehicles to boost market momentum.

Auto development sentiment is largely good in 2019 with sales of new energy vehicles expected to reach 1.5 million units, Dong noted. That is about a 19 percent annual growth from 2018’s 1.26 million units.

“In the long run, the urbanization process, upgrading of emission standards and scrapping of outdated models would contribute to the further growth potential of the auto industry,” said Dong.

Jefferies’ analyst Patrick Yuan said in a research note that early signals are suggesting the car market is bottoming out, and it expects modest sales growth with the help of multiple provincial stimulus measures.