In this year's auto market correction, commercial vehicles were the first to enter negative growth. As a "barometer" of the national economy, the commercial vehicle market has a more pessimistic outlook under this year's complex macroeconomic trends. However, the two policies recently introduced to reduce tolls and increase subsidies for scrapping and replacing old cars are expected to give the commercial vehicle market a "boost".

    Commercial vehicles are more sluggish than passenger cars

    According to statistics from the China Association of Automobile Manufacturers, in the first five months of this year, automobile production and sales increased by 3.19% and 4.06% year-on-year respectively, among which commercial vehicles entered negative growth ahead of passenger vehicles. From January to May, commercial vehicle production and sales were 1.8303 million and 1.8882 million respectively, down 3.67% and 2.05% year-on-year respectively, the first negative growth since July 2009.

    From the perspective of the commercial vehicle market segment, production and sales of semi-trailer tractors decreased by 29.03% and 27.54% respectively, which was the largest decline in the vehicle type; incomplete passenger cars and incomplete trucks were also lower than the same period last year; production and sales of passenger cars increased by 7.16% and 11.16% year-on-year respectively, which was the only bright spot in commercial vehicles. The increase in demand for public buses drove the growth of the passenger car market; production and sales of trucks were basically the same as the same period last year.

    The China Association of Automobile Manufacturers report believes that the growth rate of the national economy in 2011 showed a downward trend. Due to factors such as the country's contractionary fiscal policy and the implementation of the fuel consumption access policy within the industry, the production and sales of commercial vehicles were more sluggish than those of passenger vehicles.

    Scrapping subsidy refers to "trade-in"

    Recently, the State Council's ***utive meeting decided to further promote the healthy development of the logistics industry from the aspects of taxation, land policy, reducing road and bridge tolls and increasing investment in the logistics industry. The China Automobile Association believes that the State Council's deployment will promote the reduction of logistics enterprise costs and promote the healthy development of the logistics industry. Therefore, it is worth looking forward to the policy orientation to promote the development of commercial vehicles.

    Another more tangible benefit comes from the increase in the subsidy standard for scrapping and updating old cars. The Ministry of Finance and the Ministry of Commerce recently issued the "2011 Old Car Scrapping and *** Subsidy Vehicle Scope and Subsidy Standards", continuing to provide financial subsidies to urban buses, rural passenger vehicles, and heavy-duty trucks that meet certain conditions and are scrapped and ***d ahead of schedule, and increasing the amount of financial subsidies for vehicles that are scrapped and ***d ahead of schedule, and extending the service life of subsidized vehicles.

    The subsidy standards were based on the car trade-in policy that expired last year. In order to enhance the impact of the subsidy policy, the subsidy standards for urban buses, rural passenger transport, and heavy-duty trucks were increased from 15,000 yuan, 10,000 yuan, and 5,000 yuan to 18,000 yuan, 11,000 yuan, and 18,000 yuan, respectively.

    According to Luo Lei, an expert from the China Automobile Dealers Association, the two ministries and commissions publish subsidy standards for scrapping and replacing old cars every year, and provide subsidies for scrapping and replacing old cars used as means of production. This year, the subsidy standards have been raised in reference to the car trade-in policy that was terminated at the end of last year, so that all scrapped cars can be scrapped in a timely manner. This will be a big boon to the new car market.