Interpretation of New Regulations on Mandatory Disposal of Motor Vehicles

The "Regulations on Mandatory End-of-life Motor Vehicles" will be implemented from May 1. The New Deal has eliminated the restrictions on the use of private cars, and will extend the maximum mileage to be retired from 500,000 kilometers to 600,000 kilometers. In this regard, Shen Jinjun, executive vice president and secretary-general of the China Automobile Dealers Association, said that this is the protection and respect of private property. When it comes to the impact of the policy on the Beijing auto market, many people said that it was minimal.

The New Deal is a respect for personal property rights

"In the past, when the economy was underdeveloped, cars were used more as means of production. Since the late 1990s, cars have been used as means of transport on a large scale and have become private property, so they are forced to do so again. The scrapping regulations are not appropriate.” Guo Yan, manager of the Asian Games Village Trading Market Business Center, said that the greatest significance of the New Deal lies in the protection and respect of private property. Shen Jinjun also said that the "Regulations" not only protects private property, but also pays attention to the automotive scrapping market and will become an endogenous driving force for the sustainable development of the auto market.

The number of private cars is not infinitely extended

Although the New Deal has eliminated mandatory scrapping of private cars, it does not mean that private cars can be used indefinitely, especially in first-tier cities like Beijing. Analysts believe that the stricter national five emission standards to be implemented in Beijing and the city's limited migration policy within a range of 1,000 kilometers will affect the process of vehicle elimination by Beijing auto owners.

It is understood that starting from October 2011, policies have been introduced across the country, and used cars with State III and lower emission standards must not be relocated. By the end of 2012, there have been nearly 250 cities that have introduced the relocation-immigration policy across the country, and few cities have been able to receive vehicles under the National II standard. The old vehicle elimination and replacement plan (2013-2014) introduced at the end of last year also encourages owners to scrap old vehicles.

Little impact on the new car market

Does the "Regulation" have an impact on the Beijing auto market? The answer the reporter had after many interviews was that it was negligible. Guo Yan believes that the service life has not always been an influencing factor for the purchase of cars by Beijing consumers. This can be concluded from the trading age of used cars in Beijing. The second-hand cars traded in Beijing in the past two years are showing a trend of youthfulness. A considerable portion of used cars are 5 to 6 years old, and there are very few in more than 10 years. Some owners consider replacing cars when they purchase new cars in 2 or 3 years. Second-hand car owners have new choices as to the impact on the used car market. Currently Chen Yiyi, the marketing director of car easy auctions, which specializes in second-hand car network transactions, says that the New Deal offers new options for owners to deal with used cars. Taking a 15 year Xiali car as an example, according to the current policy, it can only be scrapped. At present, the end-of-life vehicle price is basically calculated based on the weight of the vehicle multiplied by the price per kilogram. This Xiali car also costs seven or eight hundred yuan. According to the New Deal, the owner can scrap old cars and sell them to the fourth and fifth-tier cities.

Industry sources also revealed that some vehicle dismantling plant staff will smash the roof of the vehicle with better vehicle condition and repair it and sell it at the price of the used vehicle. After the New Deal, if the owner sells an old car, it will cut off the gray interest chain in the dismantling of the vehicle.

Or will stimulate the maintenance market

After canceling the retirement period, industry insiders analyzed that the identification and evaluation of second-hand automobiles will become emerging industries, and further stimulate the car beauty and maintenance market.

In addition, because there are no laws and regulations that specifically address vintage cars, the relevant departments sometimes even treat those world-famous classic cars that are still alive as being scrapped for used cars several times and banned imports. After the introduction of the New Deal, perhaps in the near future, those classic cars with better performance will appear on the streets and become a beautiful landscape.