Will the car market still need purchase tax preferential policies next year?

In just over a month, this round of purchase tax incentives will expire. As for whether the policy should continue next year, the industry still has different views. Industry insiders who support the continuation of this policy next year believe that the rational use of this policy will be conducive to the stability of the auto market; while industry insiders who oppose the continuation of this policy next year believe that this policy disrupts the normal development of the market and will cause the market to overdevelop. Should this policy continue next year? Perhaps we should first analyze the purchase tax incentives themselves and the factors that promote the rapid growth of the auto market this year.

First of all, we need to affirm that the starting point of the purchase tax preferential policy is correct.

Generally speaking, there are three starting points for the introduction of preferential policies on automobile purchase tax at the national level : one is to promote macroeconomic growth, the second is to encourage energy conservation and emission reduction, and the third is to reduce taxes and benefit the people.

In terms of promoting economic growth, it is well known that the domestic economy has been relatively sluggish in the past two years. Therefore, in the case of sluggish economic growth, from the perspective of national strategy, it is necessary to stimulate consumption as an important means to boost the economy. Under such circumstances, the automobile industry, as a pillar industry, has the obligation to promote macroeconomic development to a certain extent. From the perspective of economic data, the contribution of the automobile industry to the macroeconomy is also quite obvious. In 2015, the growth rate of domestic GDP dropped from 7.4% in 2014 to 6.9%, while the year-on-year growth rate of the domestic narrow passenger car market in the first three quarters of 2015 was only 4.7%. After the implementation of the purchase tax preferential policy in the fourth quarter, the growth rate of the domestic narrow passenger car market in 2015 rose to 9.1%. Therefore, if it were not for the pull of the automobile market, I am afraid that the GDP growth performance in 2015 would be even worse.

In terms of encouraging energy conservation and emission reduction, it is well known that air pollution has become one of the most serious environmental problems we are currently facing. The scenes shown in Ms. Chai Jing's "Under the Dome" are shocking. Automobile exhaust emissions have always been considered one of the main culprits of air pollution. Therefore, promoting the consumption of small- displacement vehicles through the guidance of purchase tax preferential policies will undoubtedly play an important role in energy conservation and emission reduction.

In terms of tax cuts and benefits for the people, it is well known that "owning a car and a house" is the ideal life goal pursued by the people at present. However, at present, in all aspects including automobile consumption, the tax burden that Chinese consumers need to bear is relatively high, which increases the burden on the people. Therefore, the purchase tax preferential policy can reduce consumers' car purchase expenses through reasonable tax cuts and truly benefit the people.

Secondly, the faster growth of the market this year is not only stimulated by the purchase tax preferential policy.

According to estimates by Auto Industry Talk, the sales volume of new cars in the domestic car market this year is expected to increase by 3 million units year-on-year, and the market performance is far beyond expectations. But objectively speaking, such market performance is not caused by the purchase tax preferential policy alone. According to analysis, there are three factors that led to the rapid growth of the car market this year: First, the release of consumption suppression in the early stage. In 2015, the economic growth rate declined significantly, the stock market fluctuated greatly, the performance of various industries was sluggish, and consumer income was unstable, which led to some consumers postponing their car purchase plans. This part of demand was postponed to this year; second, the market competition is fierce. One of the biggest features this year is that the official price reduction promotion is very strong and extensive. Whether it is the number of car companies participating in the official price reduction or the profit margin of the car models, it can be said that it is rare, which greatly enhances the enthusiasm of consumption; third, the expectation of the withdrawal of the purchase tax preferential policy. According to calculations, consumers who buy a 100,000 yuan car can get thousands of yuan in tax exemption after enjoying the purchase tax preferential policy, which can be said to be an effective promotion and part of the overdraft of next year's car consumption.

Third, continued encouragement of small- displacement car consumption should become a long-term policy guide.

On the one hand, encouraging automobile consumption is in line with the current national conditions of boosting the economy. Encouraging automobile consumption can drive economic growth, not only promoting the real economy, but also benefiting employment. On the other hand, continued encouragement can avoid large fluctuations in the auto market. For example, in 2010, when the first round of purchase tax preferential policies were implemented, the domestic auto market achieved a year-on-year growth of 32%, while in 2011, after the first round of preferential policies were stopped, the year-on-year growth of domestic automobiles was only 3%. If the continued implementation of the purchase tax preferential policies can be ensured, large fluctuations in the auto market can be effectively avoided, which is conducive to the stable development of the auto market. Although the tax on individual vehicles will be reduced, the net increase brought about by the reasonable growth of the auto market will basically ensure the stability of this part of the overall tax revenue.

In addition, adhering to the implementation of the purchase tax preferential policy is also conducive to promoting the research and development and progress of related technologies, and is conducive to car companies to increase their active marketing for the sales of small- displacement models. In 2009 , the sales proportion of small- displacement cars of 1.6L and below was 55% . After the implementation of the two rounds of purchase tax preferential policies, this proportion increased to about 73% in 2016. Obviously, the purchase tax preferential policy that encourages the consumption of small- displacement cars has a very obvious effect on guiding the consumption of small- displacement cars and promoting energy conservation and emission reduction. Such a result is undoubtedly achieved through technology research and development and corresponding marketing efforts at the car company level based on the purchase tax preferential policy and other relevant policies and requirements at the national level. It should be said that in recent years, there have been many achievements in the domestic technology research and development and application of small- displacement cars.

Auto Industry Talk has previously discussed whether the purchase tax preferential policy should continue next year, and the view at that time was that it was unnecessary to implement it. But from the current perspective, once the purchase tax preferential policy can become a long-term policy, its positive side, such as guiding the consumption of small- displacement cars, will be amplified, and the probability of causing large market fluctuations will become smaller and smaller. At the same time, its boosting effect on the macro economy will be relatively stable and continuous, and its benefits will outweigh its disadvantages.

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.