Home » The demand for consumption upgrades is growing, and there is huge potential for the replacement of automobiles and home appliances_China Securities Network

The demand for consumption upgrades is growing, and there is huge potential for the replacement of automobiles and home appliances_China Securities Network

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New initiatives to promote consumption in China announced at the economic-themed press conference

At the economic-themed press conference held at the second session of the 14th National People’s Congress on March 6, Minister of Commerce Wang Wentao introduced two focuses on promoting consumption in China this year.

The first focus is on promoting the replacement of old consumer goods such as automobiles, home appliances, home decoration, kitchen, and bathroom products. The second focus is on boosting service consumption.

Experts analyzing the new round of trade-in initiatives predict an increase in the proportion of car trade-ins. Sales of models in the price range of 150,000 yuan to 300,000 yuan are expected to see significant growth, benefiting car companies with multi-purpose models. The green smart home appliance market is also anticipated to experience development opportunities.

Lu Jiamin, chief analyst of Cinda Securities, believes that the trade-in initiatives will lead to an increase in the ratio of car trade-ins, driving consumption upgrades. According to data from the Passenger Car Association, a significant portion of new passenger cars purchased in 2023 were bought as part of a trade-in. The trend indicates a shift towards purchasing higher-priced models after the trade-in.

Cui Dongshu, secretary-general of the Passenger Car Association, anticipates that trading in old cars for new ones will accelerate the circulation of second-hand cars and stimulate growth in the second-hand car market.

In the home appliance industry, a major update cycle is being driven by the longevity of products and policy stimulus. Data from Suning.com reveals a significant increase in trade-in orders during the Spring Festival holiday.

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Tianfeng Securities predicts that the new trade-in policies may be linked to energy efficiency policies, further unlocking the consumption potential of green smart home appliances. Domestic leading home appliance brands are expected to benefit from the promotion of green home appliances through their product advantages and established recycling systems.

Dong Mingzhu, deputy to the National People’s Congress and chairman of Gree Electric Appliances, suggests that enterprises take responsibility for replacing old appliances with new ones, cancel excessive government subsidies, regulate the second-hand home appliance market, and strengthen supervision and evaluation to increase consumer participation.

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