China is too much of a hurry with the introduction of Euro-6 in a falling market

21 June 2019

Chinese car dealerships are in a hurry to reduce inventories before the tightening of the rules for the control of emissions

Inventory levels in the automotive dealerships in China fell in may to 50-day supply to 60 days in April as coming from 1 July this year and strict environmental standards for emissions of harmful substances encourage local car dealers to sell their stocks of new cars that do not correspond to new standards.

According to the China automobile dealers Association (CADA), last month, dealerships, working for domestic Chinese brands, reduced inventories of new cars on average in may to 53 days versus 77 days in the previous month.

Dealers mass foreign brands of Chinese Assembly reduced the average stocks in may to 45 days from 52 days in April.

The inventory of dealerships offering luxury local and imported brands, foreign brands also decreased to 51 days from 53 days the previous month.

The campaign for the protection of the environment, called the "initiative for the protection of the blue sky" (Blue Sky Protection Initiative), initiated by the government of China, the four largest metropolis – Beijing, Shanghai, Chongqing and Tianjin, as well as nearly two-thirds of the provinces should make the emissions standard of vehicles State 6, similar to the European regulations of Euro 6.
This means that from 1 July in many provinces of China will start to operate new rules on emissions, because of which the buyers of cars (and even hybrids) previous environmental standards will not be able to obtain state license plates for vehicles that do not meet State standards 6. Because of this, according to CADA, the dealer centers in the cities and the provinces rushed to offer large discounts on car standards State 5, which correspond to the Euro 5 rules.

PS No, not for nothing, Beijing, have been allowed since March of this year to export Chinese cars second hand – it is clear that to sell all the drains of the 5th ecological class within the country the dealers did not succeed, although Beijing and Shanghai and was allowed to more than double the annual limit on the issuance of license plates. Similar measures Beijing offers and other provinces, which, however, is in no mood to do tax credits to any "dirty" car brands, even domestic. It will be interesting to see the results of the Chinese market in June, including the world's largest market for electric vehicles and hybrids (NEV) – the results can be very unpredictable. And the Chinese government does not even hint at the return of the coveted as manufacturers and dealers of VAT exemptions for cars with engines smaller than 1.6 l, which, as just introduced in 2009 (the global crisis) and in 2015 (the stagnation of the Chinese automotive industry due to limitations on the issuance of license plates in 11 Metropolitan areas) virtually saved the Chinese automobile industry from the stall to the crisis. Happens to do so now? So far no signs of easing of a position of Beijing no.&Look, that come out of this confrontation "spit and stone" in a neighboring country. Follow the news on www.rim3.ru.