Expert interpretation| the construction of a modern circulation system will not be achieved overnight, where does automobile circulation come from and where is it going?

Circulation is connected to production at one end and consumption at the other, playing a vital role in the national economic cycle. Judging from the actual situation on the mainland, making up for shortcomings and building a modern circulation system is not only an inevitable requirement for high-quality economic development, but also a strategic need for building a new development pattern. In this context, on January 24 this year, with the consent of the State Council, the National Development and Reform Commission issued the "14th Five-Year Plan for the Construction of a Modern Circulation System" (hereinafter referred to as the "Plan").

Wang Qi, an expert of the China Automobile Dealers Association who has witnessed the development and changes in the mainland circulation field in recent years, said in an exclusive interview with the reporter of China Automobile News that the reform in the circulation field cannot be achieved overnight, and the problems shown by the market will change with the characteristics of different periods. The establishment of a modern circulation system proposed in the "Planning" is to give new connotations, put forward new goals and point out new directions for the construction of the circulation system during the "14th Five-Year Plan" period on the basis of summarizing achievements and combining the current status quo and trend of economic and social development.

System construction should be based on the present and focus on the future

"Circulation generally refers to the circulation of commodities and money, while circulation in the reform of the circulation system and the construction of the modern circulation system mentioned in the Plan refers to the circulation of commodities." At the beginning of the interview, Wang Qi defined the concept of circulation mentioned in this interview to reporters.

In 2012, Wang Participated in the drafting of the Opinions on Deepening the Reform of the Circulation System and Accelerating the Development of the Circulation Industry (hereinafter referred to as the Opinions) issued by the State Council. He recalled that the "Opinions" defined the circulation industry as the basic and leading industry of the national economy, but in general, the mainland circulation industry is still in the stage of extensive development, with unreasonable network layout, uneven urban and rural development, and low concentration, low efficiency, and high cost. The reform of the circulation system 10 years ago formulated task planning and safeguard measures to solve the above problems.

Wang Yi said that from the perspective of the domestic commodity circulation system, automobile commodities account for about 10% of the total amount of social zero, accounting for about 27% of the limited units, playing an important role in stimulating consumption. In his view, the automobile industry can only arouse the desire of residents to buy through supply-side reform and continuous innovation. "The reason why Apple's mobile phone can occupy the minds of consumers is because it has created a precedent for the intelligence of mobile phones, which has changed people's cognition of mobile phones." Similarly, innovation in the automotive sector is likely to drive consumption and lead to new growth. Wang Qi pointed out that Chinese consumers have a relatively high degree of acceptance of scientific and technological products, and automobile intelligence and new energy vehicles will be an important direction to attract consumption and drive production.

From the perspective of the field of automobile circulation, since the implementation of the Administrative Measures for Automobile Sales in 2017, the rights and interests of automobile dealers have been further protected, the business environment has become more fair, and the new car circulation system has become healthier. At the same time, the emergence of new car-making forces and new energy vehicles has also promoted changes in the automobile distribution model, and the function of offline stores has been split, and consumers can complete the purchase by placing orders online and then picking up the car in the delivery center. Under the new circulation mode, how to protect the legitimate rights and interests of consumers and correct non-compliant practices has put forward new issues for the industry.

In addition, circulation also bears the role of information feedback, after the emergence of smart cars, how to legally collect information under the premise of network security and personal information protection, how to use flexible production to meet customer customization needs, etc., all require the automobile circulation industry to make adjustments from the direction of current and future market demand.

System building needs to take into account the interests of all parties in the market

The rapid and large-scale entry of cars into mainland households was around 2002. In 2002 and 2003, mainland automobile sales increased by more than 30% month-on-month, and the main sales channel of automobiles at that time was the automobile trading market in various places. Due to the imperfect automobile circulation system and single payment method at that time, consumers had to take hundreds of thousands of yuan in cash to the store to pay when buying a car, and many consumers often encountered after-sales problems that were difficult to solve after the purchase of a car. For example, there was a Shenyang car owner who bought a parallel imported Land Rover, after a period of time, it malfunctioned, found a sales company, learned that the company only has import capacity and no maintenance ability, after fruitless negotiations, the owner had no choice but to transport the car to Land Rover China's headquarters in Beijing to protest, after testing the car is the Middle East version of the "small trade car", did not get Land Rover China authorized to sell, accessories need to be imported, and need to pay their own expenses. With the surge in automobile sales, problems between manufacturers and consumers, consumers and dealers, and manufacturers and dealers have frequently erupted. In 2005, the Ministry of Commerce, the Development and Reform Commission, the former State Administration for Industry and Commerce promulgated and implemented the "Implementation Measures for the Management of Automobile Brand Sales", which is intended to strengthen the management of circulation channels through the authorization of automobile brands, and then the 4S shop model integrating automobile sales, maintenance, parts supply and information feedback functions began to blossom everywhere in China, and the automobile sales system in line with the market demand at that time began to be established, and the relevant rights and interests of consumers were effectively protected. In the context of the gradual regulation of the market, consumers' enthusiasm for car purchase is high, and in 2006 and 2007, mainland automobile sales increased by more than 20% month-on-month, and sales growth reached 46.2% in 2009. In the first few years of the emergence of 4S stores, although the cost of investing in 4S stores was huge, it was usually possible to recover the investment in a year or two.

With the activation of China's huge automobile consumer market, various brand vehicles have mushroomed in the Chinese market, and the competition in the automobile distribution link has begun to intensify. In 2017, in order to promote the healthy development of the automobile market, maintain a fair and just market order, and protect the legitimate rights and interests of consumers, the Ministry of Commerce issued the Administrative Measures for Automobile Sales, and abolished the Implementation Measures for the Administration of Automobile Brand Sales, which was implemented in 2005. At this point, the single system of auto sales brand authorization has been broken, and the imbalance between manufacturers and dealers has been reversed to a certain extent.

Used cars, auto finance, dismantling and recycling are gradually breaking the ice

With the growth of car ownership and age, as an important part of automobile circulation, the importance of the second-hand car market has gradually emerged. In the era of planned economy, the original Ministry of Materials carried out unified management of automobiles, at that time, automobiles belonged to the means of production and were small in quantity and high in value, and were generally scrapped. In the transformation from the planned economy to the market economy, the automobile gradually entered the family, thus forming the market demand for the circulation of second-hand cars. In some cities, used car markets opened by state-owned enterprises under the Ministry of Materials have emerged. The Administrative Measures for the Circulation of Used Cars, promulgated in 2005, stipulate that in order to protect the rights and interests of consumers, all merchants and enterprises engaged in used car operations are required to trade only in the trading market. To a certain extent, the Measures have played a positive role in standardizing the trading order, and have also solidified the main position of the second-hand car trading market in various places.

Compared with new cars, the second-hand car trading chain is more complex, the supply channels are different, the vehicle quality is different, and the transaction methods are different. In the past policy, different tax payment standards were formulated for different trading methods, restrictions on automobile emission standards hindered the transfer of second-hand cars in different places, the transfer of ownership had to go through two procedures for transfer out and transfer in increased the time cost, and the lack of establishment of commodity attributes gave rise to chaos such as personal backdoors and rent indicators. With the growth of second-hand car trading volume in recent years, the state's attention to the industry is getting higher and higher, the above problems are being solved one by one, and the situation of large circulation of second-hand cars in the country is gradually forming.

In addition, the circulation of automobiles also involves the dismantling and disposal of end-of-life vehicles. In order to crack down on "assembled vehicles" and safeguard the safety of people's lives and property, the Administrative Measures for the Recycling of Scrapped Vehicles promulgated by the State Council in June 2001 severely cracked down on the illegal sale of scrapped vehicles, "five major assemblies" and assembled vehicles. In 2019, the State Council deliberated and passed the "Administrative Measures for the Recycling of Scrapped Motor Vehicles (Revised Draft)", encouraging the remanufacturing and reuse of the "five major assemblies" of scrapped motor vehicles, significantly improving the recycling value of scrapped motor vehicles, realizing resource conservation and reuse, helping to form a long-term mechanism for the scrapping and renewal of automobiles, accelerating the elimination of old motor vehicles, and helping the source treatment of air pollution prevention and control. At the same time, the "Draft" strengthens the environmental protection of the whole process of recycling and dismantling, and turns the scrapped motor vehicles into a city mine of golden mountains and silver mountains, while also leaving green water and green mountains. This institutional change has reserved space for the development of the automobile dismantling and manufacturing industry, and the future development prospects of the industry can be expected.

Wang Qi pointed out that financial services have always been an important part of the automotive circulation field. In the past, only banks and OEMs had the strength to directly participate in auto financial services, and dealers and start-ups could only "hold their thighs", which would face the test of higher capital costs and risk control capabilities. However, finance is one of the engines to promote the circulation of automobiles, diversified financial services to enhance market vitality, promote consumption has an important role, which requires industry associations to fully understand the industry demands, do a good job of the government, financial institutions and enterprises to communicate bridges, promote cooperation, while exploring financial services suitable for dealers and small and micro enterprises financial service model.

Electrification and intelligence trigger new growth points in the industry

In Wang Qi's view, if you compare it with agricultural products and ordinary industrial consumer goods, you will find that the modernization of the automobile circulation system has come to the forefront. With the development of new energy vehicles and intelligent vehicles, the sales model of new cars may change, which is not only the need for manufacturers to explore innovative models to expand sales, but also the inevitable need to meet the car purchase needs of different consumers. In the circulation model of industrial consumer goods, there has always been a game of interests between product suppliers and channel providers. The formulation of the circulation policy is not to directly participate in or specify the distribution of benefits, but to improve the status of the weaker party as the goal, try to ensure that the two sides can have equal dialogue, promote the development of industry norms, and win-win cooperation.

Talking about the construction of the "14th Five-Year Plan" modern circulation system and the reform of the circulation system specific to the automobile industry, Wang Qi believes that first of all, the new car distribution system will continue to change; secondly, the blockage point of the circulation of second-hand cars will be dredged, such as tax standards, turnover indicators, financial norms, etc. will be gradually solved, and the cultivation of large-scale second-hand car dealers will be the future direction; Third, the recycling and remanufacturing in the field of scrapped cars is promising, and opening up the circulation channels of recycled parts will form new social and economic benefits. At the same time, as mentioned earlier, with the continuous development of driverless technology, as well as the government is actively promoting the reform and innovation of laws and policies, cars equipped with L3 and L4 will gradually enter thousands of households, and car intelligence and electrification will certainly be the biggest consumption growth point.