The Zhitong Finance App learned that on July 14, Cui Dongshu, Secretary General of the Passenger Transport Association, announced his thoughts on domestic demand for automobiles in the “15th Five-Year Plan” to expand consumption. He said that the promotional fee policy has captured the growth point of core consumption potential. There is plenty of room, and it is of great significance. Currently, the sinking potential of the Yinfa economy, county travel, etc. has not been fully unleashed. It is proposed to establish supporting measures such as economy car standards, C7 driver's license, and personal tax deductions for car purchases. Cui Dongshu believes that this will effectively improve the threshold just needed for entry and the blockage at both ends of high-end replacement, and provide optimal threshold and support for the continuous expansion of the automobile market during the “15th Five-Year Plan” period.
On July 13, the central government issued the “15th Five-Year Plan” to expand consumption, which clarifies the ideas, goals, key tasks, and policy initiatives for the development of the consumer sector during the “15th Five-Year Plan” period. The “Fifteenth Five-Year Plan” to expand consumption positions automobile consumption as the core gripper for expanding domestic demand, marking a shift from short-term subsidies to promoting automobile consumption to building a long-term system. Currently, domestic automobile demand is facing four prominent contradictions: weakening total volume, imbalances between urban and rural areas, poor circulation, and lack of long-term mechanisms. There is an urgent need to break the three-dimensional system from steady macroeconomic growth, industrial electrification transformation, and structural incremental release.
I. General policy of the “Fifteenth Five-Year Plan” to expand consumption
The “Fifteenth Five-Year Plan” for Expanding Consumption is a top-level design document for the central government that focuses on the medium- to long-term layout for 2026-2030 and elevates the expansion of domestic demand as a strategic base. The core is to use consumption as the primary driving force for economic growth and promote a shift in the mode of economic development from being driven by investment and exports to being dominated by domestic demand. The plan has four main lines: one is to shift from short-term stimulus to long-term system supply, reduce pulsed interventions such as one-time vouchers and phased tax cuts, and instead build stable expectations through standard construction, fiscal and tax reform, and circulation system improvement; second, from commodity consumption to equal emphasis on goods and services consumption, lengthening the consumption chain and unleashing consumption potential throughout the life cycle; third, from urban consumption to urban-rural collaboration, using counties, rural areas, and structural groups such as silver hair and multiple children as core incremental sources; fourth, from purchasing management to use management to clean up and optimize supporting measures that restrict unreasonable consumption environment. As a bulk consumer product that accounts for about 10% of society and has the longest industrial chain, automobiles are the core gripper for expanding domestic demand in this round of planning. The automobile provisions in the plan reflect the implementation path of the above four main lines.
II. The current domestic automobile demand highlights contradictions
Currently, the domestic automobile market has moved from an incremental era to a stage of stock renewal, and multiple blockages are suppressing the recovery of domestic demand. First, residents' income expectations are weak. The price war over the years has spawned a wait-and-see mentality. New car retail sales continue to be pressured. As a bulk consumer product accounting for zero 10% of the society, cars are hampering overall consumption recovery; second, there is a mismatch between urban and rural supply and demand, the first and second tier is becoming saturated. Counties and rural areas lack affordable and compliant electric vehicles, and the hidden dangers of low-speed non-standard vehicles are prominent; third, the policies are mostly short-term purchase tax subsidies, and insufficient urban and rural charging facilities; fourth, most of the policies are short-term purchase tax subsidies, and long-term incentive mechanisms are lacking, and the market is large.
3. The country introduced the core logic of automobile consumption promotion policies
1. Stabilizing the macroeconomic market just needs support
The number of cars owned by 1,000 people in China is only about 200, which is far below the level of developed countries. The gap with the penetration rate of consumer goods such as housing is obvious, and there is still plenty of room for improvement in automobile consumption. In particular, retail sales of new cars have continued to weaken since this year. The year-on-year decline in May was about 15%, which was the main factor driving down the company's zero growth rate. The upstream and downstream automobile industries link hundreds of industries and absorb large amounts of employment, which is the core gripper for expanding domestic demand. Facing geographical barriers to exports and uncertainty about external demand, opening up the full domestic automobile chain cycle can stabilize the social zero and economic growth chassis.
2. Adapt to industrial electrification transformation nodes
The market conflict changed from “difficult to buy a car” to “difficult to use and exchange a car”. The policy promoted a shift in car purchase management to the optimization of vehicle support, completed charging infrastructure, consolidated the global leading edge of China's new energy industry, and helped the transition to dual-carbon energy.
3. Activate stocks and narrow the gap between urban and rural consumption
Relying on the reform of the circulation of used cars, the loosening of purchase restrictions, unbundling, and sinking market demand, we take into account the immediate needs of large cities and the consumption potential of counties to serve common prosperity and rural revitalization; at the same time, lengthen the consumption chain of the automotive aftermarket and broaden the profit space for the industry.
4. Establish a long-term consumption promotion system
Get rid of the impulsive stimulus of disposable consumer vouchers and short-term tax cuts, and form a stable policy environment for a 15-5 cycle through systematic reforms in standards, taxation, circulation, and infrastructure to avoid overdrafts in demand and large market fluctuations.
IV. Predicting the effects of policy implementation
Short-term 2026-2027 purchase restrictions and the simplification of used car circulation will gradually release one-million-class demand, increase the share of replacement vehicles to more than 55%, and the penetration rate of new energy vehicles will continue to increase; domestic and foreign sales of new vehicles are expected to exceed 40 million units by the end of the mid-term “15th Five-Year Plan”. Overseas markets and county markets will become the main growth force, and the NEV penetration rate will stabilize at more than 70%. The industry has moved away from simple price internal factors, and profit growth points have shifted to services such as used cars, maintenance, and battery recycling; the charging network covers full coverage to achieve interactive energy storage in the vehicle network, completing the green transformation of transportation, and the gap between urban and rural automobile consumption has narrowed markedly.
5. Strategic significance of the policy
Open up a closed loop of initial purchase, replacement, second-hand circulation, and post-market domestic demand; consolidate the fulcrum of the domestic cycle; improve the electrification support system to strengthen the global competitiveness of Chinese automobiles; transform automobiles from purchase control to service use at the institutional level to provide a model for large-scale consumption reforms such as home appliances and housing; at the same time reduce the comprehensive cost of residential vehicles, taking into account people's livelihood travel security and medium- to long-term carbon emission reduction goals.
6. Personal Views on Suggest Promoting Automobile Consumption
Proposal 1: Introduce a unified national standard for economical electric vehicles, in line with the direction of Yinfa's economic policy
Low-speed electric vehicles (commonly known as “old man music”) are a travel tool for the elderly with strong Chinese characteristics in the county and rural markets. The popularity rate is very high. The reflection behind this is a gap between actual demand and compliant supply — there is huge travel demand, but there is a lack of targeted supply of regular electric vehicle products. The establishment of standards for economical cars is highly consistent with the country's strategic direction of developing the Yinfa economy.
At present, China has entered deep aging. The “Opinions on Developing the Silver Hair Economy to Improve the Welfare of the Elderly” clearly lists age-appropriate travel and age-appropriate products as key areas for cultivation. Economical electric vehicles are a key vehicle for implementing this direction. Formulating a national standard for overseas small scooter systems to standardize size, battery life, and safety configurations can make up for the shortcomings of the current lack of supply of affordable and compliant cars and the elderly being forced to use uninsured low-speed vehicles. The popularity of compliant scooters can release the immediate needs of a huge number of Yinfa's first purchases. After the elderly have a car, they will further drive diversified consumption for medical treatment, cultural tourism, supermarkets, and rural leisure, forming a chain effect of automobiles driving the Yinfa economy.
Moreover, economical electric vehicles will also open up huge space in overseas markets. Many overseas consumers are not rich and the roads are narrow, and China's economical electric vehicles will inevitably become the world's magic cars.
Proposal 2: Add a C7 special driver's license to ease travel pain points in the county
Set up a C7 simple driver's license for national standard economy electric vehicles, simplify test subjects, lower the evidentiary threshold for middle-aged and elderly people, and relax medical examination and assessment standards for the elderly. Currently, there is strong travel demand for middle-aged and elderly people in townships, but it is difficult for most middle-aged and elderly people to pass traditional C1 and C2 tests, and they are forced to use non-standard low-speed vehicles. After the implementation of the C7, an economical electric vehicle, the compliant scooter obtained full right of way. Together with the construction of charging and maintenance outlets in the county area, it systematically cleared up blockages in the entire process of car purchase and use in rural areas, and together with economical vehicle standards, formed a complete travel plan for the elderly.
Proposal 3: Introduce a long-term fiscal policy to deduct personal tax on car purchases
Household car purchase expenses and interest on automobile consumer loans are included in special additional personal tax deductions to replace short-term phased subsidies, and a five-year stable incentive mechanism is established. Wage-earning households can reduce the entry burden. Replacing middle and high-end models for high-income groups can drastically reduce car purchase costs, effectively shorten the average car replacement cycle for residents, stabilize long-term car purchase expectations, and drive two-way growth in new car sales and used car replacements.
General advice: Optimize the consumption threshold in both directions to simultaneously drive entry-level and high-end exchanges
Use economical car standards and C7 driver's licenses to lower the initial purchase threshold in the silver and rural markets, and consolidate the basic consumption market; rely on personal tax deductions for car purchases to motivate households with many children to upgrade and replace, and leverage the consumption of middle- and high-end models. Both sides are working simultaneously to resolve the structural contradictions of lack of supply at the lower end of the market and insufficient momentum for high-end replacement, balance urban and rural consumption and intergenerational consumption, push the industry out of low prices, and achieve hierarchical and sustainable growth.