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The reform of refined oil prices and taxes： will the car market make waves as soon as it comes out？

December 5, 2008, Xinhuanet

　　On the evening of the 5th, the much-watched "Exposure Draft" was finally released. Fuel tax, a focus topic that has never cooled down in China’s auto market for more than a decade, has finally been substantially solved. Fuel tax reform, which has been around for a long time, will be settled as soon as January 1 next year. Will it make the Chinese auto market turbulent this year? 　　

　　Fuel tax reform, wait for more than a decade

　　After 11 years of waiting, the fuel tax reform plan has finally emerged. Since the National People’s Congress passed the Highway Law of the People’s Republic of China in 1997, it was first proposed to replace the "maintenance fee" with "fuel surcharge". After 11 years, the "fuel tax" has been ups and downs but failed to be levied, and it has almost become a long-term "heart disease" of the Chinese auto market.

　　However, with the collapse of international oil prices in recent months, there is also a "golden opportunity" for domestic fuel tax reform.

　　On the evening of the 5th, the National Development and Reform Commission, the Ministry of Finance, the Ministry of Transport and the State Administration of Taxation jointly issued an announcement to solicit public opinions on the "exposure draft" of the refined oil price tax reform plan. According to the plan, this reform will abolish road maintenance fees, waterway maintenance fees, road transportation management fees, road passenger and freight surcharges, waterway transportation management fees, and waterway passenger and freight surcharges, and gradually and orderly cancel the government’s loan repayment of secondary road tolls.

　　The reform plan will increase the unit tax of gasoline consumption tax from 0.2 yuan per liter to 1 yuan, diesel from 0.1 yuan per liter to 0.8 yuan, and the unit tax of other refined oil products will be increased accordingly without raising the current price of refined oil. The "Reformation Plan for Refined Oil Prices and Taxes" will be implemented from January 1, 2009.

　　According to industry analysts, there are many reasons why the fuel tax reform plan has not been implemented for 11 years, including the failure to coordinate the interests of various departments and the distribution of central and local issues. However, in recent years, it has been mainly constrained by the high international oil prices. As a result, the fuel tax reform that has been mentioned many times has ended with "only the sound of the stairs".

　　"The plunge in international oil prices is the best opportunity for China to implement fuel tax reform. If this opportunity is lost, it may take a few more years." Rao Da, secretary general of the National Passenger Car Market Information Association, analyzed that using this "time window" to launch fuel tax reform will straighten out the pricing mechanism of refined oil products in our country and create a good environment for the future development of China’s auto market.

　　Rao Da believes that the tax amount proposed by the current plan is lower than originally expected by the industry, and it explicitly eliminates road maintenance fees, reducing the burden on car owners.

　　"This plan is indeed more reasonable, and the rate is lower than the original guess of 30% or 50%, or the plan of increasing 1 yuan, so the implementation will be relatively smooth," said Zhao Chenxi, an auto industry analyst at Haitong Securities. "Especially the fuel tax is finally levied in the form of increasing the fuel consumption tax, which avoids the problem that the introduction of a new tax will face complicated procedures. Now the introduction will be natural." 　　

　　The overall situation of the car market is unhindered, and internal structural adjustment is accelerated

　　Before the introduction of the fuel tax reform, China’s auto market had already encountered a "freezing point". At the beginning of this year, the booming Chinese auto industry put forward the ambitious goal of producing and selling 10 million units and exporting 1 million units. However, with the new surge in oil prices since March and the sudden tightening of the economic situation, the domestic auto market has taken a sharp turn for the worse. Even before September, the national passenger car consumer market experienced five consecutive monthly negative growth, which is unprecedented in the history of China’s auto industry.

　　　China’s auto market, which is preparing to "warm up for the winter", will be "hit" by the fuel tax reform most directly related to the auto industry at the beginning of next year. So this "sudden" variable will be a "snowflake" that adds a touch of chill to the auto market, or a "match" that warms up the auto market?

　　"My opinion is that the car market is basically stable, and the fuel tax reform plan currently introduced has little impact on the car market," said Rao Da, secretary general of the All-China Ride Federation.

　　He pointed out that the purpose of the fuel tax reform is mainly to straighten out the fuel pricing mechanism in our country and promote energy conservation and emission reduction, rather than to save the car market, so it is not a driving force for the car market.

　　Zhong Shi, an auto analyst, said: "The introduction of fuel tax reform has little impact on the domestic auto market as a whole. The experience of fuel tax implementation abroad also shows that it is difficult to directly change consumers’ willingness to buy cars because of fuel tax reform. However, the introduction of fuel tax reform will have a profound impact on the domestic auto market segment and the adjustment of the structure. Energy-saving and low-consumption small cars and small-displacement vehicles will play an increasingly important role."

　　"Fuel tax reform will not have a big impact on the car market, but the proportion of models with large emissions and high fuel consumption will decrease, while the proportion of energy-saving cars will increase." Jia Xinguang, an auto industry expert, believes that as our country’s auto market matures, this structural adjustment has actually begun to appear since last year.

　　However, auto analyst Zhao Chenxi also pointed out that the current plan has little impact on the passenger car market, but the impact on commercial vehicles such as trucks and buses with much greater mileage is very obvious. 　　

　　"Energy consumption moderation" will become the concept of the "post-fuel tax" era

　　"The new plan is undoubtedly the most fair and just policy and regulation, and it effectively reflects the principle of more vehicles and more taxes." Xing Wenjun, an auto industry expert, said the fuel tax reform plan will give government agencies and enterprises, consumers and automakers a strong signal that the powerful lever of taxation will promote the production and sales of energy-saving and environmentally friendly small-displacement vehicles.

　　　Zhong Shi, an auto analyst, said that "energy consumption control" will be the most important signal to the Chinese auto market and the whole society after the introduction of fuel tax reform, because as a developing country and a net importer of oil, China’s two major pressures on energy and emissions will become increasingly heavy. Through taxation, energy conservation and emission reduction will be moved from concept to conscious implementation.

　　Gong Xiaorong, who works at a bank in Shanghai and has owned a private car for more than four years, told reporters: "I think the fuel tax reform can reflect fairness and efficiency. The abolition of road maintenance fees already reflects a kind of fairness. It changes the size of the displacement, no matter how much you drive, no matter how much you drive, you will be charged the same road maintenance fee. Instead, you have independent choice, you can adjust and choose through your own actions, which reflects the principle of efficiency."

　　　She said that after the implementation of the fuel tax reform, based on the mileage she currently drives about 18,000 kilometers per year, if the road maintenance fee is removed, it will still be lower than the original fee. "With the string in my mind that you drive less and save more money, your car habits will change in the future."

　　　Automotive analyst Jia Xinguang said that although the current plan shows little change in fuel costs, excluding expenses such as road maintenance, as long as a simple calculation can be seen that different fuel consumption cars and mileage are different, and the cost gap is significantly widening. Over time, this structural change will guide consumers to change their habits in car selection, car purchase, and car use, thus changing the structure of the domestic car market and highlighting the theme of energy conservation and consumption reduction.

　　Moreover, industry experts also believe that the fuel tax reform will also promote our country to create more conditions and opportunities in the research and development of automobile fuel-saving technologies and new energy vehicles. December 5

It is expected that the Great Wall artillery pickup truck will be officially launched in September this year.

　　On August 30th, the passenger version of Great Wall Gun, a pickup truck model owned by Great Wall Motor, was officially launched at Yongchuan Factory in Chongqing. The Great Wall Gun is a brand-new product of Great Wall pickup truck, adopting a brand-new design language, and its overall shape is very tough. According to previous news, the car is expected to be listed in September this year. With the official launch of this model in Chongqing Yongchuan factory, it also marks the official completion and production of Great Wall Motor Chongqing factory. In addition, the official announcement of its pre-sale price range is 126,800-159,800 yuan.