" broke all the blocking points, and it took us 14 years. In 14 years, we sharpened our sword, and we used the spirit of Foolish Old Man to move mountains. In 14 years, China Automobile Circulation Association continued to reflect the demands of the industry, and finally promoted The comprehensive introduction of a package of policies in the second-hand car field has created a fairer and more favorable policy environment for the development of the industry.”
html On June 26, Shen Jinjun, who had just completed a survey of dealer companies in Jiangsu Province, was interviewed by 21 Century Economic Report reporter. said in an exclusive interview.Four days ago, on June 22, the State Council executive meeting proposed to further unleash the potential of automobile consumption. The most important one is to activate the second-hand car market and promote the consumption of new cars. For small non-operational second-hand cars, the relocation restrictions will be completely lifted from August 1, and transfer registration will be subject to separate endorsement and temporary number plates from October 1. The introduction of the
policy means that all the blockages that have hindered the circulation of second-hand cars in the past decade or so have been cleared.
As the president of the China Automobile Dealers Association, Shen Jinjun was deeply touched by the process of promoting the implementation of policies in order to facilitate the transaction and commercial circulation of second-hand cars.
"Since 2008, the China Automobile Circulation Association has been continuously calling and advising relevant departments on the many congestion and pain points that affect the circulation of second-hand cars. There are four factors that affect the circulation of second-hand cars. The first is used car appraisal and evaluation The national standard of . Although this standard was released under the promotion of the association, it is still necessary to continue to increase the efforts to implement the standard ; the second is to break the migration restrictions; the third is to reduce the tax on distribution companies; the fourth is to restore second-hand "Car product attributes." Shen Jinjun told reporters, "At present, from a policy perspective, all the bottlenecks in the circulation of second-hand cars have been cleared. The next step is to make the circulation of second-hand cars as smooth as the circulation of new cars."
, with the increase in car ownership, my country's second-hand car market is developing rapidly. In 2021, my country's second-hand car transaction volume reached 17.585 million units, a year-on-year increase of 22.6%.
As an important link in the entire life cycle of automobiles, second-hand cars play an increasingly important role in revitalizing the stock of automobiles, driving the increase of new cars, and promoting automobile consumption.
However, compared with mature car market countries such as Europe and the United States, the development of my country's second-hand car market is still immature. The main manifestations are: first, the business model is based on "brokerage" (rather than distribution); secondly, the business entity is "brokerage companies" ” (rather than distribution companies), resulting in most second-hand car transactions being carried out in the name of person-to-person or brokerage, which not only results in the loss of tax revenue, unfair competition, the legitimate rights and interests of consumers are not protected, but also the emergence of "bad" The phenomenon of "money drives out good money" makes it difficult to cultivate a second-hand car dealership enterprise with large business scale, high brand awareness and strong market competitiveness. In addition, restrictions on the relocation of second-hand cars still exist in some areas, which also hinders the formation of a unified national market for second-hand car transactions.
However, with the introduction of policies, Shen Jinjun believes that my country's second-hand car market will usher in a big explosion.
"Once the policy is implemented and well implemented, in the next one to two years, my country's second-hand car transaction volume will reach or exceed the sales volume of new cars, and will be much higher than the sales of new cars." Shen Jinjun told reporters, " As early as this year or as late as next year, the sales volume of second-hand cars will be equal to or exceed the sales volume of new cars. "
"Let the circulation of second-hand cars be as smooth as new cars."
"21st Century": What was the business model of second-hand cars in my country in the past?
Shen Jinjun: As of today, the transaction method of used cars in my country is still based on the brokerage model rather than the distribution model. The so-called "brokerage model" means that due to the property rights of second-hand cars, the transaction method of second-hand cars is the transfer of assets, and this model is caused by two policies.
The first one is that our country's " Motor Vehicle Registration Regulations " requires that vehicle ownership changes must go through transfer procedures.Therefore, the second-hand car business entity needs to first transfer the purchased second-hand car to its own name. After taking ownership of the second-hand car, it will then transfer the second-hand car and register it to the buyer's name when selling it. This results in the second-hand car being unable to be sold. Disposed of as a commodity like new car.
Another one is the tax policy. Second-hand car dealers operating second-hand cars must pay 2% of the full price of the car for value-added tax, but transactions between individuals are exempt from value-added tax. Obviously, from a tax policy perspective, the distribution model is not supported, but transactions between individuals are supported.
However, as cars have rapidly entered households in recent years, second-hand car transactions have become increasingly active. However, due to transaction and tax policy regulations, the business of many second-hand car dealers is actually to "back accounts" through a large number of personal identities, buying second-hand cars and then selling them, and distributing them in the name of brokers.
Under such circumstances, a series of disadvantages have arisen: First, the exemption of value-added tax for personal transactions of second-hand cars has led to a reduction in the country’s tax revenue in the field of second-hand car distribution; at the same time, the second-hand car business entities under the brokerage model are small in scale and cannot guarantee after-sales service. and the legitimate rights and interests of consumers, market integrity issues are prominent, and many chaos have occurred in the entire second-hand car industry, resulting in consumers "daring not to sell or buy."
So far, my country's second-hand car business entities are still in a "scattered, small and weak" state.
"21st Century": How can the pain points and blockages affecting the circulation of second-hand cars be overcome step by step?
Shen Jinjun: Since 2008, the China Automobile Circulation Association has continuously appealed and made suggestions to relevant departments regarding the many congestion and pain points that affect the circulation of second-hand cars. The policy is really reflected in the "Automotive Industry Adjustment and Revitalization Plan " issued in 2009, which mentioned second-hand cars, including three aspects: first, to establish national standards for second-hand car appraisal and evaluation; second, to To change the used car value-added tax collection method, the third step is to establish the commodity attributes of used cars, which was called the "temporary property rights system" at that time.
Until June 2014, the "Technical Specifications for the Appraisal and Evaluation of Used Cars" was officially implemented, but the implementation was far from enough, causing many people to believe that our country lacks this standard; in 2020, the Ministry of Finance and the State Administration of Taxation issued a The announcement on value-added tax policies for second-hand car distribution stipulates that from May 1, 2020 to December 31, 2023, taxpayers engaged in second-hand car distribution who sell the second-hand cars they acquire will be levied at 3% according to the simplified method. According to the rate , the reduced VAT rate of 2% is changed to the reduced VAT rate of 0.5%. Therefore, both enterprises and individual industrial and commercial households can pay the VAT rate of 0.5% as long as they are engaged in the business of purchasing second-hand cars and reselling them.
However, in addition to standards and taxes, the issues of second-hand car relocation restrictions and product attributes still need to be solved. These are also the two aspects that this policy focuses on solving.
"21st Century": How do the restrictions on the relocation of second-hand cars hinder circulation?
Shen Jinjun: Restrictions on the relocation of second-hand cars began during the 2008 Beijing Olympics. At that time, in order to solve Beijing's severe and outstanding environmental problems, gasoline vehicles below National Level 1 and diesel vehicles below National Level 3 were prohibited from moving into Beijing. Subsequently, Hebei, Shanghai, and Guangzhou also successively set regulations restricting the relocation of second-hand cars. By 2016, according to incomplete statistics, up to 95% of prefecture-level cities in our country had issued regulations restricting the relocation of used cars.
Until 2017, the Ministry of Commerce, the Ministry of Public Security, and the Ministry of Environmental Protection issued a letter to implement the policy of canceling the restriction on the relocation of second-hand cars. Except for the Beijing-Tianjin-Hebei, jiangsu, Zhejiang, , and Pearl River Delta regions, no locality was allowed to set restrictions on vehicles that passed environmental inspections. relocation measures.
However, the three regions of Beijing-Tianjin-Hebei, Jiangsu, Zhejiang and Shanghai, and the Pearl River Delta have set very high standards for moving in. Only National VI vehicles are allowed to move in. In fact, it has only been two years since new cars that meet the National VI standard have been on the market, and their numbers are very low, let alone second-hand car transactions.
So to this day, many people still believe that the reason for the restriction policy is environmental protection. But in fact, I think environmental protection and relocation restrictions are two different things. In the final analysis, relocation restrictions only involve the implementation of emission standards.Used cars restricted for relocation are in-use cars that have gone through the transaction process, while second-hand cars of the same standard in the place of relocation are allowed to be used. However, used cars moving in from other places are required to comply with another standard. This is suspected of double standards and administrative monopoly. , artificially dividing the smooth circulation of second-hand cars and hindering the formation of a unified national market.
"21st Century": What is the core content of the second-hand car policy proposed by the National Council?
Shen Jinjun: On June 22, the National Standing Committee clearly proposed that the restrictions on the relocation of small non-operating second-hand cars will be completely lifted from August 1, which means that the restrictions on relocation in the Beijing-Tianjin-Hebei, Jiangsu, Zhejiang and Shanghai, and the Pearl River Delta region will be broken. National V standard models will be circulated nationwide, the flow of second-hand cars will accelerate, and the formation of a unified national market for second-hand car transactions will be accelerated.
Secondly, there is the issue of taxation. In the past, second-hand car transactions between individuals were exempt from value-added tax, while dealers operating second-hand cars had to pay value-added tax at a rate of 2% of their sales. A large number of dealers operated second-hand car business in the name of brokerage companies, resulting in national relevant tax revenue of almost zero.
Then, the policy proposed by the National Standing Committee on June 22 that "transfer registration will be implemented with separate endorsement and issuance of temporary license plates starting from October 1" confirmed the commodity attributes of second-hand cars. After separate endorsement (the process of second-hand car acquisition-delisting-maintenance-sale), the second-hand car changes from the original asset to a commodity, the commodity can be traded, and the second-hand car can be bought and sold like a new car.
Our next goal is to promote the implementation and execution of policies and make the circulation of second-hand cars as smooth as new cars.
"21st Century": With the removal of the "three mountains" of second-hand car circulation, what are the remaining constraints in second-hand car transactions?
Shen Jinjun: There are four factors that affect the circulation of second-hand cars. The first is the national standard for second-hand car appraisal and evaluation. Although this standard was released under the promotion of the association, it still needs to continue to increase efforts to implement the standard; the second is to break the migration restrictions; the third is taxation; the fourth is the product attributes of used cars.
From a policy perspective, all the bottlenecks in the circulation of second-hand cars have been cleared. Of course, there will definitely still be some detailed issues in implementation and execution in various places. Many problems arise during development, so we must use a development perspective to solve these problems. The association will spare no effort to continue to help industry companies and members make good use of these policies, and timely summarize and provide feedback on problems and experiences during the implementation process.
"Second-hand car transactions will definitely explode"
"21st Century": The pain points restricting the circulation of used cars have been eliminated. How can used cars drive the development of the industry?
Shen Jinjun: It took us 14 years to break all the blocking points.
html Sharpen your sword in 2014. This is what my colleagues in the association and I said. We use the spirit of Foolish Old Man to move mountains. In 14 years, we and industry companies have jointly moved the government and promoted the industry to achieve new development.Of course, there is another very important realistic factor. More than ten years ago, the importance of the second-hand car market did not attract the attention of the government and OEMs, but the situation has completely changed today.
At present, the number of cars in my country has exceeded 300 million. Once these stocks are revitalized, they will make a huge contribution to new car sales. Maintaining the healthy and sustainable development of the automobile market by revitalizing the stock and driving growth is a virtuous cycle. What is the stock of
in the entire automobile industry chain? It means that used cars can be traded, and consumption can be expanded while trading and replacement, so that second-hand cars can feed back into the new car market.
"21st Century": What impact will policies have on second-hand car e-commerce?
Shen Jinjun: Frankly speaking, the development of used car e-commerce in my country so far is mostly C2B or C2C model.
Once the second-hand car market expands in the future, dealers will definitely take two actions with the second-hand cars obtained through replacement. In addition to retailing brand-certified second-hand cars, they will also develop wholesale business for second-hand cars of non-brands, that is, they will sell a large number of second-hand cars. used cars are wholesaled to car dealers rather than sold directly to consumers.
Then this car dealer includes a B2B e-commerce platform, but the premise is that this e-commerce platform is engaged in B2B business.The best B2B e-commerce company abroad is Cox Group's used car auction platform Manheim, which has an auction scale of 10 million vehicles a year in the United States.
Among them, the upper end of the B2B e-commerce platform includes manufacturers, financial companies, and 4S stores, especially leasing companies. It is impossible to open a store to quickly process used cars, because opening a store means after-sales service; the lower end is also a car dealer, which is a small second-hand car dealer. , the 4S store is both the upper-end seller and the buyer who places the order. Only in this way can e-commerce platforms operate in an asset-light model.
Therefore, the development direction or trend of e-commerce in the future is B2B. In the future, the business model of the second-hand car market will also be diversified, and consumers will have a variety of choices. As distribution companies engaged in wholesale and retail enter the market, and brokers and distribution companies coexist, the future second-hand car market will be perfect. market.
"21st Century": What are your predictions for the second-hand car market in the second half of this year or next year?
Shen Jinjun: Second-hand car transactions will definitely explode.
We have spent 14 years promoting the introduction of a package of policies, but there are still many policies that have not been implemented. The next work of the association is to implement the policies and identify and solve problems during implementation. Once the policy is implemented and well implemented, in the next one to two years, my country's second-hand car transaction volume will reach or exceed the sales volume of new cars, and will be much higher than the sales of new cars.
Secondly, the activity of the second-hand car market will also greatly promote new car sales and lower the consumption threshold, boosting car consumption. Given the current market holdings, the largest consumer demand for cars is not new purchases, but replacements. Therefore, by revitalizing the second-hand car market, consumers will have a higher willingness to buy new cars.
Therefore, the National Standing Committee’s policy on second-hand cars is of great significance. It is not only a structural adjustment to revitalize the second-hand car market and stimulate new car consumption; it is also an immediate stimulus policy that does not require the state to pay a penny, especially After superimposing the replacement and subsidy policies in various places, it will play a huge role.
In addition, there are two endogenous driving forces for the development of the overall automobile market - one is second-hand cars and the other is automobile finance. In fact, auto finance is also mentioned in this document. It plays a crucial role in leveraging finance to expand consumption, stimulate consumption, and increase the turnover frequency of cars.
"21st Century": When will the transaction volume of second-hand cars surpass that of new cars?
Shen Jinjun: As early as this year or as late as next year, the transaction volume of second-hand cars will be equal to or exceed the sales of new cars. Last year, my country's second-hand car transaction volume was about 17 million units, and new car sales were about 25 million units.
But in the United States, the peak of new car sales was 17.5 million, but the average annual retail sales of used cars has already reached 40 million. Combined with used car sales and new car sales, car consumption in the United States is very strong.
In the past, we always said that China is the world's largest automobile consumer. In fact, this is not the case. There is no problem that China is the world's largest automobile producer, but automobile consumption includes new cars and used cars. In the past, no one paid much attention to second-hand cars, but in the future, second-hand car consumption will definitely be an important part of automobile consumption, and we still need to work hard to catch up.
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