China Automobile Dealers Association: Automobile consumption index in June 2022 is 80.7

On July 1 , 2022 , the China Automobile Dealers Association released the latest " Automobile Consumption Index " : The automobile consumption index in June 2022 was 80.7 , which continued to increase compared with the previous month .

Recently, in order to ease the difficulties of the auto market under the influence of the epidemic, relevant national departments and local governments have intensively introduced policies to promote automobile consumption. On May 31 , the Ministry of Finance and the State Administration of Taxation issued the "Announcement on Reducing the Purchase Tax of Some Passenger Cars", which halved the vehicle purchase tax for passenger cars with a displacement of 2.0 liters or less with a purchase date between June 1 , 2022 and December 31 , 2022 and a unit price (excluding value-added tax) of no more than 300,000 yuan . Provinces and cities across the country have also successively introduced local auto market incentive policies such as subsidies for new vehicle purchases, trade-ins and relaxation of purchase restrictions. With the vigorous promotion of the top leaders and the active response of local governments, this round of policies has been unprecedented in intensity and has a significant stimulating effect on the auto market. While the policies are in force, the overall positive development of the epidemic prevention and control in China, as well as the dealers' rush to increase sales in the first half of the year, have led to a significant increase in auto sales in June , releasing the demand for car purchases that was suppressed by the epidemic in the early stage.

In addition, the policy of reducing vehicle purchase tax will continue until the end of the year. Customers will not rush to buy cars in the early stage of the policy implementation. In addition, due to the economic downturn, the decline in residents' income and more rational consumption, the increase in car sales will have a certain impact. Combining the above factors, it is expected that car sales in July will be the same as in June or increase slightly.

Automobile consumption index trend chart

Judging from the sub-indices that make up the automobile consumption index, the demand sub-index in June 2022 was 78.2 , basically the same as the previous month. As the epidemic eases, the car purchase demand suppressed by the epidemic has gradually been released in May and June . At the same time, due to the continuity of policies such as the phased reduction of some passenger car purchase taxes, the car purchase demand in July will return to normal and be released steadily.

Automobile Consumption Index – Demand Sub-Index

The store entry index in June 2022 was 84.7 , higher than the previous month. With the effective implementation of epidemic prevention and control measures, the overall epidemic prevention and control situation in the country has improved, the production and living order has been restored at a faster pace, consumers' travel freedom has been improved, and the overall consumer market has rebounded, resulting in an increase in terminal store traffic.

Automobile Consumption Index – Store Entry Index Trend Chart

The purchase sub-index in June 2022 was 91.0 , higher than the previous month. It is expected that the automobile market will continue to develop in July . Under the influence of the national and local government's consumption promotion policies, combined with the easing of the epidemic, some regions have carried out large-scale auto shows and other promotional activities, resulting in an increase in automobile sales in July .

Automobile Consumption Index – Purchase Sub-Index Trend Chart

The policy of reducing vehicle purchase tax is more powerful than expected. It can effectively stimulate auto consumption, drive a strong recovery in the auto industry, resist downward economic pressure, and is of great significance to the recovery of my country's auto market.

This month's survey also showed that nearly 80% of dealers believe that the policy of reducing vehicle purchase tax can boost consumer confidence, encourage consumers to visit stores, and increase car sales. According to the trend of policy promotion in previous years, car sales will have a steady growth in the early stage of policy implementation, and the promotion effect will be significantly strengthened when the policy is withdrawn in the fourth quarter. So overall, car sales will usher in a new round of growth in the second half of the year.