By hannover-web.com In July, the National Development and Reform Commission, along with the Ministry of Finance, announced increased subsidies to encourage consumers to scrap old vehicles and purchase new energy and fuel-powered cars. Subsidies have been raised from 10,000 yuan to 20,000 yuan for new energy vehicles, and from 7,000 yuan to 15,000 yuan for fuel vehicles. Additionally, the subsidies for purchasing energy-efficient appliances, such as refrigerators and washing machines, have been increased to 15% of the purchase price for items meeting level two or higher efficiency standards. This move follows the March release of the State Council’s plan to promote a large-scale device upgrade and trade-in program.
The policies are extensive, focusing on key areas like home appliances and home renovations, while increasing financial support for replacements in these sectors and ensuring that benefits are quickly felt by residents. The favor for upgrading is evident, given that more than 3 billion major household appliances are currently in use in China, indicating significant potential for modernization. During a recent visit to several appliance retailers in Beijing, numerous signs promoted trade-in options and subsidies, allowing for direct consumer savings.
“Consumers often come in asking about the available subsidized models, the extent of the subsidies, and how to dispose of their old appliances,” noted Zhang Peng, the manager at a Hisense member store. He highlighted that models eligible for subsidies are selling well; for instance, a model priced around 10,000 yuan could receive a 20% subsidy if it meets the first-level energy efficiency standard, effectively giving a discount.
For many businesses, the trade-in policy has significantly stimulated the market. “According to our data from the National Day holiday, sales of Haier and Casarte brands in Beijing increased by 60% year-on-year, with Casarte experiencing a remarkable 78% jump,” said Li Jian, the marketing director for Haier Smart Home in Beijing. Similarly, Wu Wenjie, the KA manager for Changhong-Meling in the Beijing-Tianjin area, reported that foot traffic in stores and sales have surged more than 60% compared to the previous year.
What strategies are businesses deploying to make it easier for consumers to trade in old items and more attractive to buy new ones? Many brands are now offering home valuation and recycling services, and providing additional subsidies based on the residual value of old appliances.
“The government’s subsidies are benefiting the public, and the trade-in policy is excellent,” commented a consumer purchasing a wall-mounted washing machine.
The trade-in subsidy initiative is also boosting the automotive market. In June, the Ministry of Finance announced a budget allocation for 2024, with an annual total of nearly 11.2 billion yuan for vehicle trade-ins. Data reveals that during the National Day holiday, the country saw a 65.9% increase in second-hand car sales and an 11.7% rise in new car sales, with new energy vehicles up by 45.8%.
“Currently, over 40% of customers are opting for trade-in solutions to purchase their cars,” remarked Xue Rui, manager of the NIO Center at Beijing’s Blue Harbor. Since NIO announced a trade-in subsidy of up to 1 billion yuan in April, the brand has consistently delivered over 20,000 vehicles each month for five consecutive months.
Promoting the trade-in program for consumer goods is not just a beneficial policy for businesses and consumers but also a crucial strategy in expanding domestic demand. The 150 billion yuan in long-term special government bonds allocated for supporting this initiative was fully distributed to localities by early August. According to the Ministry of Commerce, since the appliance trade-in policy was implemented, over 8.238 million consumers have purchased approximately 11.78 million appliances across eight categories, generating over 55.793 billion yuan in sales. As of October 7, subsidies have been applied for over 1.27 million vehicles through the automotive trade-in platform, resulting in sales exceeding 160 billion yuan, with more than 60% of the applications for new energy vehicles.
The ongoing transformation of vehicles to new energy, appliances to smart technology, and home renovations is being significantly propelled by this tangible policy support, enhancing the quality of life for consumers.
