Guangdong introduces new measures to boost consumption
? The Guangdong government has introduced new measures to boost consumption.
? Automobile and home appliances are the two key categories.
? This is in line with our previous discussion about the economic growth target being
back on the table.
? Sentiment on names in the auto supply chain, especially new energy vehicles, is
expected to improve, given news flow on the resumption of production and policies to
boost automobile sales. The market may also chase home appliance names, but
property market movement remains constrained.
? The analysis in this report is based on industry and macro figures and may differ from
the view s of individual analysts, in some cases.
Guangdong to boost consumption
Yesterday, Guangdong province released new measures to boost consumption, with
automobiles and home appliances the key categories. According to government’s press
release, local residents will receive a subsidy of Rmb10,000 per vehicle when they
purchase a new energy vehicle (NEV) if they scrap their old vehicle. Buyers will get a
subsidy of Rmb5,000 if they purchase an internal combustion engine (ICE) vehicle. If
buyers sell their old vehicles, they will receive a subsidy of Rmb8,000 per vehicle when
purchasing an NEV. Buyers will get a subsidy of Rmb3,000 if they purchase an ICE vehicle
and sell their old vehicle. If buyers do not own a vehicle, they are also eligible for the vehicle
purchase subsidy, but only if they purchase a vehicle in May or Jun 2022. An individual
buyer will receive a subsidy of Rmb 8,000 per vehicle when purchasing a new eligible NEV
in Guangdong province from 1 May to 30 Jun 22. How ever, this subsidy is not available at
the same time as the above vehicle replacement subsidy. Based on our understanding, the
subsidy for NEV purchases offered by Guangdong province is in addition to subsidies
offered by the Central Government. In addition to the subsidies for purchasing a vehicle,
the Guangdong government will allow more people to buy cars in Guangzhou and
Shenzhen, two cities that have imposed restrictions on car purchases. In May–Jun 2022,
Guangzhou w ill add a car purchase quota of 30,000, and Shenzhen w ill add a quota of
10,000 on top of the original.
Apart from automobiles, the Guangdong government will promote purchases of home
appliances and encourage cities to issue consumption vouchers for retail, restaurant,
cultural tourism, accommodation and sports purchases. The Guangdong government will
encourage all localities and cities to organize home appliance production and sales
enterprises to launch activities to benefit the people and promote consumption, focusing
on encouraging more efforts to convert to green and smart home appliances, and
promoting the upgrading of home appliances in the province. The provincial government
will reward cities and municipalities that achieve remarkable results in promoting the
consumption of home appliances according to their sales performance. The specific plan
will be formulated by the Provincial Department of Commerce and the Provincial
Department of Finance.