By outdoor-nature-child.com “One in every three customers is looking to trade in their old car,” said Chen Aoli, the sales manager at the Audi dealership in Guangzhou, during an interview with a reporter from Southern Daily. “Since the launch of the trade-in policy, we’ve seen a significant increase in both foot traffic and sales in our store.”
As the “Golden September and Silver October” sales period comes to a close, dealers are reporting impressive results driven by the trade-in policy. On October 23rd, despite it being a weekday, the Guangqi Toyota dealership in Guangzhou’s Haizhu District was bustling with customers. The reporter observed that within just 15 minutes, three groups of potential buyers came in to inquire about purchasing vehicles. Many sales staff were actively engaging with customers both in-store and online, eager to enhance their sales performance.
To stimulate car consumption this year, the government has rolled out multiple initiatives to encourage trade-ins, partnering with local governments, automakers, and dealerships to boost consumer demand through subsidies and enhanced incentives. Data shows that as of October 16th, the Ministry of Commerce’s trade-in platform has received over 1.42 million subsidy applications, with daily new applications surpassing 20,000 for the first time, indicating the policy’s success. According to estimates from the National Development and Reform Commission, the renewal of automobiles and home appliances could create a trillion-yuan market space.
This suggests that with the expansion of trade-in policies, there’s potential for further stimulation of car consumption, increased market activity, and strengthened consumer confidence. The end of the year may also bring a “tail effect” in car sales, injecting momentum for high-quality development.
During a visit to the Guangzhou auto market, the reporter found that many dealerships noted a clear uptick in sales during the “Golden September and Silver October” period, largely due to compelling incentives attracting consumers.
Several rounds of trade-in policies have been implemented this year. On October 12th, Guangzhou optimized its trade-in program further, increasing the subsidies available for scrapping and renewing vehicles. Customers who sold their old cars between April 1 and December 31 this year and purchased new vehicles from July 24 onwards can benefit from new subsidy standards. Gasoline cars can receive up to 15,000 yuan per vehicle, while new energy vehicles are eligible for up to 16,000 yuan in subsidies, encouraging more old car owners to participate.
Car manufacturers are also ramping up their incentives to offer better deals to consumers. At the time of reporting, the Toyota Camry, for instance, can offer trade-in subsidies of up to 59,000 yuan after discounts; Dongfeng Honda’s model could provide a comprehensive discount of 67,000 yuan; and the SAIC Volkswagen Passat pro is available with a loan discount of 30,000 yuan.
With government-backed incentives further boosting car sales, interest in trade-ins has noticeably increased. “Since July, there has been a sharp rise in customers looking to trade in their vehicles, which has contributed to a boost in sales,” a sales representative from Guangqi Toyota explained, noting that about 70% of their customers since September have been coming in for trade-ins.
“This year we’ve seen the largest discounts in recent years, with some models dropping to 60-70% of their suggested retail price due to multiple subsidies,” remarked Chen Aoli. “The trade-in policy has had a tangible promoting effect, with the signing rate for trade-ins increasing to about 30%.”
He added that while many customers are initially drawn in by the subsidies, the manufacturer’s promotional efforts are also compelling. For example, Audi launched special promotions during this peak sales season that not only increased foot traffic but also made models like the A4L, A6L, and Q5L extremely popular among consumers.
Wang Zengen, the sales manager at a GAC Aion dealership, noted that the current subsidies are significantly larger than before, making it easier for consumers to feel confident in their purchases. He reported that the trade-in policy has led to an 18% month-over-month increase in retail sales at his store in September.
“The number of trade-ins rose from an average of 5-6 per month to 15 in September, with employees also contributing 2-3 additional trade-ins. Since September, we’ve seen a marked increase in customer foot traffic and order quantities, significantly boosting new car sales,” Wang said, emphasizing that the subsidy program has been a crucial support for the sluggish car market.
In this year’s “Golden September and Silver October” peak season, the trade-in policy has sparked a sales surge. The sales manager of a BYD dealership noted that the demand for travel and outings during this season has led to noticeable sales growth. “The National Day holiday brought a mini-boom, and customer traffic continues to grow, with expectations for even better performance as we approach year-end,” he said. Executives from GAC Aion, FAW Audi, and SAIC-GM-Wuling all expressed optimism for the market, believing that a purchasing boom is imminent before the policy shifts.
The insights into the Guangzhou auto market reflect a broader trend in China’s automotive landscape this fall. Data from the China Association of Automobile Manufacturers indicates that in September, domestic sales of passenger cars reached 2.525 million, marking both a month-over-month increase of 15.8% and a year-over-year rise of 1.5%.
As the implementation of the trade-in policies continues to bear fruit, the growth in request volumes for vehicle scrapping subsidies has accelerated, driving passenger vehicle sales upward and revitalizing market conditions. With numerous regional governments and automakers actively promoting trade-in initiatives, the expectation is for sustained interest and opportunities for future growth.
In light of these encouraging trends, experts believe that the favorable conditions set by the ongoing trade-in policies will stimulate consumer confidence, invigorating both the car sales market and the broader automotive supply chain. Assistant Secretary of the China Passenger Car Association, Cui Dongshu, suggested that these policies are integral in improving the industrial and supply chain, fulfilling the requirements for developing new production capacities.
For a long-term impact, experts advocate for regular assessments of trade-in policies, taking into account consumer feedback and market changes. Establishing a collaborative approach among different stakeholders—including local governments, automotive manufacturers, and dealerships—could enhance the effectiveness of these programs, ensuring they stimulate consumption, meet environmental goals, and foster economic growth.
As we anticipate continued enthusiasm in the auto market, driven by effective policies and incentives, the sales momentum through to the end of the year looks promising, with industry leaders signaling a potential “tail effect” in market performance.