The General Office of the Ministry of Commerce issued a document requesting the complete cancellation of the policy on the removal of second-hand cars.

Innovative circulation model releases consumption potential

● The Ministry of Commerce sorted out the current main tasks of promoting automobile consumption in the commercial field and some local good experience and practices, and formed the”Guidelines for Promoting Automobile Consumption in the Commercial Field” and”Local Experiences and Practices to Promote Automobile Consumption”

● For areas where the policy of restricted relocation of second-hand cars is planned to be restored, the competent commercial departments of various regions shall put forward opinions and suggestions to the policy formulation department and report to the local people’s government and the Ministry of Commerce in a timely manner

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□ Reporter Wan Jing

In February this year, the General Office of the Ministry of Commerce issued the”Notice on Printing and Distributing Guidelines for Promoting Auto Consumption in the Commercial Field and Some Local Experiences and Practices” (hereinafter referred to as the”Notice””). The notice pointed out that the Ministry of Commerce has sorted out the current main tasks of promoting automobile consumption in the commercial field and some local good experience and practices, and formed the”Guidelines for Promoting Automobile Consumption in the Commercial Field” (hereinafter referred to as the”Work Guidelines”) and the”Local Promotion of Automobile Consumption”. Consumer Experience and Practice.

The”Work Guidelines” are clear and completely abolish the policy of restricting the removal of used cars. Except for key areas for the prevention and control of air pollution, it is not allowed to restrict the movement of second-hand vehicles that meet the emission standards for in-use vehicles. Implement relevant national document requirements to further facilitate the relocation of second-hand cars. For areas where the policy of restricted relocation of second-hand vehicles is planned to be restored, the competent commercial departments of various localities shall submit their opinions and suggestions to the policy formulation departments and report to the local people’s government and the Ministry of Commerce in a timely manner.

At the same time, it also gave specific suggestions on expanding new car consumption, developing second-hand car consumption, promoting car renewal consumption, and cultivating the automotive aftermarket, in order to further activate the automobile industry and the second-hand car market, and ensure my country’s automobile industry Steady growth has provided key operational guidelines for industrial policies.

Completely abolish the restrictions on moving.

Promote the open sharing of information

Automobiles are the”pillars” of the consumer market. With the continuous rapid development of the automobile industry and the improvement of people’s living standards year by year, my country has entered the ranks of the world’s automobile production and consumption countries. Data show that the current car ownership in my country has reached 217 million, and the second-hand car market has huge potential.

“The implementation of the new policy means that it will accelerate the circulation of second-hand cars in various regions and greatly promote the market transaction volume.” Director of the Institute of Commercial Law of Renmin University of China, Vice President of the China Consumers AssociationLiu Junhai believes that the complete abolition of the restrictions on the removal of second-hand cars can greatly enhance the development and utilization of the residual value of second-hand cars and help form a national unity , Standardized and efficient second-hand car market order. For prospective car owners who want to buy used cars, the price will be cheaper and the procedures will be simpler.

The requirements of the”Work Guidelines” facilitate the transaction of second-hand cars. Refine the supporting measures for “cross-provincial administration” to ensure that small non-operating second-hand vehicles are issued invoices and go through the transfer registration procedures at the transfer site for implementation of the policies. Support the development of second-hand car dealership business and promote the removal of unreasonable restrictions on the registered residence of second-hand car dealership enterprises. Actively promote the establishment of motor vehicle registration service stations in qualified second-hand car trading markets and dealerships, improve supporting services, and provide consumers with”one-stop” services such as transaction, taxation, registration, and insurance.

In response to the low value retention rate, opaque information, and disorderly management problems in the current second-hand car circulation market, the”Work Guidelines” also put forward normative requirements, that is, to promote the open sharing of second-hand car information. All localities can try first, establish a cross-departmental cooperation mechanism, strengthen the interconnection and sharing of used car information, and improve the information disclosure system. Guide second-hand car operators to display vehicle-related information in a prominent position in the form of window tables to fully protect consumers’ right to know. Encourage relevant agencies and industry organizations to provide insurance claims, repair and maintenance and other vehicle condition information inquiry services to relevant parties in the second-hand car market, and promote the transparency of second-hand car information.

The industry generally believes that the”Work Guidelines” will not only promote the second-hand car market, but also optimize the current operating conditions of the second-hand car market.

It is understood that compared with the huge potential of the second-hand car market, there is still a big gap between the activity of second-hand car transactions and market expectations in my country in recent years. According to data released by the China Automobile Dealers Association, the cumulative transaction volume of the second-hand car market across the country in 2020 was 14.3414 million, a decrease of approximately 580,000 vehicles compared to 2019. Putting this data on the international market for comparison, my country’s second-hand car transaction still lags behind that of developed countries. According to calculations, the transaction volume should theoretically be close to 40 million.

An important reason for the decline in the volume of second-hand car transactions lies in the widespread implementation of second-hand car removal policies throughout the country, which creates many obstacles to the circulation and transactions of second-hand cars nationwide. The so-called”restricted migration” means that some places have adopted measures such as restricting environmental protection standards and restricting years for second-hand motor vehicles in other provinces or cities to prevent large numbers of foreign vehicles from flowing into the local market. According to incomplete statistics, more than 90%of prefecture-level cities across the country are implementing policies to restrict the removal of used cars to varying degrees.

As early as March 2016, the General Office of the State Council issued”Several Opinions on Promoting Convenient Trading of Second-hand Cars” (commonly known as the”National Eight Articles”), requiring 299 prefecture-level cities across the country to exclude Beijing-Tianjin-Hebei , Jiangsu, Zhejiang and Shanghai, and Yangtze River Delta in the three major regions of the 15 cities, other regions are not allowed to formulate policies to restrict the movement of second-hand cars. Places that have implemented restrictions on moving must be cancelled before the end of May 2016.

But this opinion has not been taken seriously, and the removal of the restrictions on the removal of second-hand cars is progressing slowly. In this regard, relevant functional departments have spared no effort to issue a number of documents and policies to promote the speeding up of service guarantees for the circulation of second-hand vehicles in various places.

On December 29, 2016, the former General Office of the Ministry of Environmental Protection and the General Office of the Ministry of Commerce jointly issued the”Notice on Strengthening the Supervision of Environmental Protection Standards for Second-hand Vehicles”, requiring all localities to strictly implement the”National Eight Articles”. For vehicles that meet the requirements of the in-use vehicle emission standards in the place of transfer after the period of validity of the periodic environmental inspection and safety inspection of motor vehicles, no other restrictive measures shall be set in each place.

In March 2017, the Ministry of Commerce, the Ministry of Public Security, and the former Ministry of Environmental Protection jointly issued a letter that all localities should report the implementation of the cancellation of the second-hand car restriction policy before April 14, 2017. The State Council will be invited to conduct on-site inspections in due course. However, even if the deadline is approaching, the cancellation of the restrictions on relocation in accordance with the requirements of the three ministries and commissions is not optimistic. Most local governments are still on the sidelines at the implementation level.

In the second half of 2017, after the Ministry of Commerce and others conducted on-site inspections on the circulation of second-hand cars in various provinces, a total of 13 provinces involving 135 cities issued relevant documents on the complete abolition of restrictions on the removal of second-hand cars. There is still a long way to go before the request made by the State Council.

There are differences in policy understanding.

Slow progress in lifting the restriction on relocation

Why is the local government so”passive and sabotaged” when it comes to abolishing the restriction on relocation? Liu Junhai analyzed that environmental protection policy is one of the important reasons. The second-hand car removal policy began in 2008. At that time, Beijing, which was preparing for the Olympic Games, set strict environmental protection standards for second-hand cars moved in from other places in order to solve the problem of environmental pollution. Due to geographic relations, Hebei has always been the influx of second-hand cars in Beijing, and the entry barrier for second-hand cars has been set up since then. In December 2011, due to factors such as air pollution, traffic safety, and vehicle purchase tax, the relevant departments of Hebei Province issued a restriction policy to prohibit foreign second-hand cars below the national three standards and over 6 years of age from entering the local market. Subsequently, Shanghai, Tianjin, Shandong, Guangdong and other provinces and cities have introduced policies to restrict the removal of second-hand cars.

Luo Lei, deputy secretary general of the China Automobile Dealers Association, believes that taxation issues are also an important factor considered by local governments. Removal of the restriction on relocation will affect local sales of new cars and indirectly affect the taxes paid by new cars. Relatively speaking, second-hand cars are cheaper or less valuable than new cars.

An investigation by a reporter from the Rule of Law Daily found that there are different understandings about the standards for”allowing the implementation of restrictions on moving vehicles”. The local government’s understanding is inconsistent with the document requirements of the three ministries. There is no difference in understanding about the prohibition of yellow-label vehicles from moving in, but there is a big difference between local policies and the requirements of the three ministries as to whether old vehicles should be restricted from moving in. The documents of the three ministries and commissions require that the removal of old cars shall not be restricted, but the local government believes that the”National Eight Articles” allow the removal of old vehicles.

According to our understanding, there are two types of vehicles that are allowed to be restricted in the”National Eight Articles”:one is the vehicles that the state encourages to eliminate; the other is the vehicles that the state requires to be eliminated. Many localities have clearly pointed out in the documents implementing the”National Eight Articles” that the vehicles that the state encourages and require to be eliminated refer to old vehicles and yellow-label vehicles respectively. The reason is that the original Ministry of Environmental Protection’s”Notice on Clarifying National Standards for Encouraging and Requiring Retired Vehicles to Promote the Circulation of Second-hand Vehicles” pointed out that the vehicles encouraged and required by the state to be eliminated refer to old cars and yellow-label vehicles respectively. The original Ministry of Environmental Protection and other six ministries and commissions”Notice on Printing and Distributing the Implementation Plan for the Elimination of Yellow Label Vehicles and Old Vehicles in 2014″ stipulated that yellow label vehicles refer to gasoline vehicles with emission levels lower than the National I emission standards and the National III emission standards. Diesel vehicles, in principle, old vehicles refer to vehicles that do not meet the National IV emission standards.

However, documents from relevant ministries and commissions require that old cars not be restricted from moving in. On December 29, 2016, the former General Office of the Ministry of Environmental Protection and the General Office of the Ministry of Commerce jointly issued the “Notice on Strengthening the Supervision of Environmental Protection Standards for Second-hand Vehicles”, requiring that “no localities shall set other restrictive measures”.”Vehicles to be eliminated by the state.” Compared with the”National Eight Articles”, there are fewer”vehicles encouraged by the state to be eliminated.” In March 2017, in the letter of the Ministry of Commerce, the Ministry of Public Security, and the former Ministry of Environmental Protection on”Please provide information on the implementation of the policy on the removal of the restriction on the removal of second-hand cars,” the”exclusion” clause for the removal of the restriction on the removal of second-hand cars was further clarified. Including”vehicles that the state requires to be eliminated.” However, in actual implementation, many local governments have implemented the”National Eight Articles” standards, and the old cars that do not meet the National IV emission standards are also prohibited from moving in.

In response, the relevant person in charge of the Market Construction Department of the Ministry of Commerce responded that the criteria for abolishing the policy of restricted relocation of second-hand cars are very clear. For vehicles that meet the requirements of the in-use vehicle emission standards in the place of transfer within the validity period of the periodical inspection and safety inspection of motor vehicles and have passed the environmental inspection of the place of transfer, other restriction measures shall not be set in each place (nationally defined key areas for air pollution prevention and control) Except for vehicles that are required to be eliminated by the state). The emission standards for in-use vehicles mentioned here do not refer to the emission standards required for the sales of new vehicles in the transfer area, but the emission standards for vehicles allowed to drive in the region. In other words, all vehicles that are allowed to travel on the road must be allowed to move in.

The person in charge stated that there are problems of inconsistent understanding and inconsistent standards for the cancellation of the second-hand car restriction policy. At the end of 2016, the Inspection Office of the General Office of the State Council supervised the cancellation of the second-hand car restriction policy. At the end of 2016, the former General Office of the Ministry of Environmental Protection and the General Office of the Ministry of Commerce jointly issued the”Notice on Strengthening the Supervision of Environmental Protection Standards for Second-hand Vehicles”, once again clearly requiring all localities to strictly implement relevant regulations. The notice shall prevail if it does not comply with the provisions of the notice.

Encourage innovative circulation models

Promote online and offline integration

Since 2018, under the strong promotion of the Ministry of Commerce, the former Ministry of Environmental Protection and other ministries and commissions, the There are more and more provinces and cities with restricted relocation policies for used cars.

In April 2020, the Ministry of Commerce disclosed to the public that the 25 provinces and cities outside the key areas for air pollution prevention and control have clearly abolished the restrictions on the removal of second-hand cars, and the relevant regions have also cancelled the restrictions on the movement within the province. Benefiting from the removal of the restriction on relocation, the activity of the used car market has increased significantly. In 2019, the proportion of cross-regional transfers of second-hand cars increased by 8.7 percentage points compared with 2015.

However, opening up the circulation of second-hand car markets in various places and implementing the spirit of lifting the restrictions on the removal of second-hand cars cannot only rely on the cancellation and abolition of policy documents, but also need to improve related supporting measures. For example, the evaluation of the value of second-hand cars, the unification of environmental protection standards in various regions, etc., have revealed that the implementation of the State Council’s removal of restrictions on the removal of second-hand cars and breaking through various local market barriers cannot be achieved overnight.

The reporter of”Rules of Law Daily” noticed that the”Work Guidelines” proposes to innovate the second-hand car circulation model. Support the transformation and upgrading of the used car trading market, improve the conditions of software and hardware facilities, establish an advance payment system, improve the level of informatization application, and promote standardized and large-scale development. Strengthen the construction and application of the used car credit system, improve the credit information of used car operators, improve the efficiency of credit supervision, and promote the development of industry branding. Guide second-hand car operators to accelerate the application of new technologies such as big data and intelligence, and promote the integration of online and offline development.

Liu Junhai believes that expanding consumption is an important foothold for opening up the economic cycle. In the large consumer market, automobile consumption accounts for more than one-tenth of the total retail sales of consumer goods in the entire society, and accounts for more than 4%of GDP. This data is only for automobile consumption, not for the aforementioned manufacturing and other upstream and downstream industries. Therefore, it is of great significance to activate the second-hand car circulation market. In addition to the cancellation of the policy document on the restriction on the removal of second-hand cars, how to improve the market service level that promotes the circulation of second-hand cars is also an issue that government authorities need to consider.

Luo Lei believes that the complete abolition of restrictions on relocation is conducive to the healthy development of the auto market, increasing circulation, expanding the scope, and increasing the leverage of the market economy. The implementation of the new policy will also promote the establishment of a more complete residual value evaluation system in the new energy second-hand car market, which can effectively improve the sales status of new energy vehicles at a discount, and can also enhance consumers’ purchase of new energy vehicles. confidence. This will also drive the emergence of a group of second-hand car dealer groups, as well as the development of related service industries such as auto parts, maintenance, and insurance, which will play a positive role in optimizing my country’s overall automobile market structure.

Source:Rule of Law Daily