New round of "cars going to the countryside" policy is expected to be introduced in the near future

Sources recently revealed to reporters that in order to stimulate consumption and expand domestic demand, a new round of “cars to the countryside” policy is expected to be introduced in the near future. In addition, the "home appliances to the countryside" policy is expected to continue to implement and improve supporting measures.

Sources said that this "car to the countryside" policy is expected to "expand" compared to before. Prior to this, the state provided a one-time financial subsidy for farmers to purchase mini-buses with a displacement of 1.3 liters or less, and the new round of policies may expand the subsidy to 1.3 liters or less for small-displacement cars and heavy trucks.

At present, the rural market has become an important engine for the growth of consumer electronics and automobile consumption. Statistics from the National Bureau of Statistics show that since April this year, the growth rate of retail sales in rural areas has started to exceed that of cities, and in August, the difference in growth rates between the two has significantly increased. Compared with urban residents, the income growth of farmers and low-end manufacturers is even more obvious, and the potential for consumption growth is even greater.

Analysts pointed out that in 2011, the number of vehicles per 1,000 people in China is 70 vehicles, which is about half of the world average. Second and third-tier cities and rural areas have lower vehicle ownership and greater rigid demand, which is expected to become the main force for the growth of the automobile market in the future. Under the background of the current slowdown in macroeconomic growth, auto consumption is expected to play an important role in boosting the growth of domestic demand. The “automobile to the countryside” policy is one of the current choices for better economic stimulus policies.

The “Adjustment and Revitalization Plan for the Automotive Industry” released in 2009 proposes that 5 billion yuan be allocated to “cars to the countryside”. From March 1st to December 31st, 2009, one-time financial subsidy was granted to farmers who purchased minivans with a displacement of 1.3 liters and below, and scrapped three-wheeled vehicles or low-speed trucks for light trucks. In early 2010, the State Council decided to extend the “automobile to the countryside” policy for one year to December 31, 2010.

In addition, the rural market has a strong driving effect on the growth of home appliance consumption. Since its implementation in 2007, the “Home Appliances to the Countryside” policy has significantly promoted the 3rd and 4th markets. Data from the Ministry of Commerce showed that in August, sales of home appliances to the countryside went to 7.09 million units, achieving sales of 19.33 billion yuan, a year-on-year increase of 52.4% and 58.3% respectively. As of the end of August, the country has sold 269 million units of “home appliances to the countryside” and achieved sales of 644.2 billion yuan.

Analysts believe that since the implementation of the “Home Appliances to the Countryside” policy, home appliance companies have basically completed channel construction and brand promotion in the rural market and have established a firm foothold in the rural market. The rural market space in the future is still huge. The continued implementation of the “Home Appliances to the Countryside” policy will effectively stimulate domestic consumption.