The three major tracks of automobiles, furniture and home decoration, how to seize the opportunity of trade-in

What new opportunities will the three major industries of automobiles, home appliances and home decoration, kitchen and bathroom, which have entered the stock market stage, usher in under the stimulus policy of trade-in?

On the 14th, during the 4th China International Consumer Products Expo, Sheng Qiuping, Vice Minister of Commerce, attended the theme of green finance and sustainable development, he said in his speech that the Ministry of Commerce will trade in consumer goods as the top priority of this year's work, and will vigorously promote the replacement of automobiles with "energy", household appliances with "intelligence", and home decoration "renewal", promote the green renewal and quality upgrading of residents' durable consumer goods, accelerate the green and low-carbon transformation of the economy and society, and promote sustainable development.

Aiming at the concentrated release period of potential renewal demand of the three major tracks

On the 12th, the Ministry of Commerce and other 14 departments issued the "Action Plan for Promoting the Trade-in of Consumer Goods" (hereinafter referred to as the "Action Plan"), which focuses on the three major tracks of automobiles, home appliances and home decoration, kitchen and bathroom, and proposes to gradually establish an effective mechanism of "easier to remove the old and more willing to replace the new", and strive to expand domestic demand.

The next day, Guangdong, a major province in the automobile, furniture and home improvement industries, issued the "Implementation Plan of Guangdong Province to Promote Large-scale Equipment Renewal and Consumer Goods Trade-in" (hereinafter referred to as the "Implementation Plan"), which refines the specific ways and scenarios of the coordination and trade-in of each link of the three major track industry chains.

In 2023, the number of civilian cars in China will reach 336 million, and the number of home appliances in major categories such as refrigerators, washing machines, and air conditioners will exceed 3 billion.

Previously, Wang Wentao, Minister of Commerce, said at the economic theme press conference of the second session of the 14th National People's Congress that the automobile, home appliances and home improvement markets have a large number of complexes, and a considerable number of products have a long service life and high energy consumption emissions.

In an interview with Yicai, Deloitte Consulting's Consumer Goods & Retail Industry Leader Deng Nie said that compared with other consumer goods such as clothing or cosmetics, consumers are more receptive to the concept of trade-in in the three major categories of automobiles, home appliances and home decoration, kitchen and bathroom. At the same time, compared with other consumer goods, home appliances and home improvement products are more polluting to the environment, and now consumers are paying more attention to the green environmental protection of the living environment.

At present, how to properly dispose of the waste power batteries of new energy vehicles has become a hot topic to promote the healthy development of the industry. Fujian Province is strengthening the cultivation of the new energy vehicle battery recycling industry by rewarding and subsidizing relevant enterprises, and the "Implementation Plan" of Guangdong Province also mentions support policies for the scrapping and recycling of new energy vehicle power batteries and electric bicycle batteries.

Guangdong will formulate and revise recycling standards for scrapped vehicles, waste power batteries and retired photovoltaic and wind power, and promote the formulation and implementation of quality grading standards for important consumer goods such as electric bicycle batteries. At the same time, it cultivates the industrial chain of recycling, remanufacturing and remanufacturing product sales and after-sales service, and promotes the cascade utilization of power batteries and other product equipment and key components. In addition, it will also strengthen the overall coordination of central and local funds, and jointly support eligible car trade-in, new energy buses and battery renewal.

Some business entities in the industrial chain are expected to expand

The cooperation between various business entities in the industrial chain will be strengthened, and some business entities are expected to expand, which will become one of the main highlights of the trade-in policy.

The "Action Plan" points out that the main body of second-hand car business will be cultivated and strengthened, and the brand and large-scale development of second-hand cars will be promoted. Specifically, it is embodied in supporting the sale of second-hand cars from brokerage to distribution, and encouraging automobile manufacturers to carry out second-hand car replacement, manufacturer certification and other businesses.

In terms of household appliances, it will also cultivate a number of typical cities and enterprises for the recycling of renewable resources such as waste household appliances, and develop new models such as "Internet + door-to-door recycling" and "car instead of garage". Among them, it is mentioned that home appliance manufacturers should be guided to actively expand the recycling business of waste household appliances through their own reverse logistics system, or entrusting third-party enterprises such as home appliance recycling and dismantling.

Peng Peng, executive chairman of the Guangdong Provincial Institute of Structural Reform, told reporters that the implementation of relevant policies in the future should promote the production and operation of the three local industries. He believes that the inventory of related industries is relatively large, and the destocking of bulk consumer goods is conducive to consumption-driven economic recovery.

Strengthening cooperation between the upstream and downstream of the industrial chain is also a demand to promote the sustainable transformation of the industrial chain. Deng Nie told reporters that the carbon emissions generated by the operation of consumer goods and retail enterprises account for a relatively small proportion of the industrial chain, and when it comes to the three categories of carbon emission accounting scope, it will be found that the carbon emissions of the consumer goods and retail industry chain are more concentrated in the upstream, such as agricultural production, raw materials, energy and fuel, transportation and other links. The necessity of paying attention to the entire value chain is to reduce the carbon emissions of the entire upstream and downstream of the industrial chain.

Taking the coordination of the home appliance industry chain as an example, the "Action Plan" points out that it is necessary to improve the recycling system of waste household appliances, open up the "venous circulation" of waste household appliances recycling, and smooth the cycle of household appliances renewal and consumption. Give full play to the guiding role of fiscal and taxation policies, study and introduce financial policies related to the disposal of waste electrical and electronic products, and smooth the whole chain of recycling and treatment of waste household appliances.

The Action Plan points out that by 2027, the recycling volume of end-of-life vehicles will double compared with 2023, the transaction volume of second-hand cars will increase by 45% compared with 2023, and the recycling volume of waste household appliances will increase by 30% compared with 2023. Guangdong plans to standardize the annual recycling and dismantling of about 800,000 scrapped cars, more than 4 million second-hand cars, and 10 million units (sets) of waste electrical and electronic appliances by 2027.

The three tracks have different levels of difficulty in promoting trade-in

Peng Peng told reporters that the difficulty of the three major tracks of automobiles, home appliances and home improvement in promoting the trade-in is different. New energy vehicles are popular, compared with fuel vehicles can save a lot of money, if there are some discounts, subsidies, but also trade-in, the market prospect is better. Household appliances can still be used for a long time, although the effect is not so good, the enthusiasm of residents to trade in the old is not high, if the subsidy is higher, the recycling is more convenient, and the new household appliances are more intelligent and attractive, then the promotion effect can be turned around.

Peng Peng also believes that the trade-in of kitchen and bathroom furniture may be more difficult to promote, because it involves redecoration and comprehensive redress. If the economic recovery is expected to be better, employment and income conditions are more stable, consumers will be more motivated to change their clothes. Of course, the large preferential subsidies will also make some consumers tempted.

From the perspective of the green transformation and coordination of the industrial chain, Deng Nie pointed out that the current topic of green transformation and coordination of the industrial chain is still hot, but at this stage, there are not many consumer goods and retail enterprises that can drive the upstream and downstream of the industrial chain to promote the sustainable development transformation together, and the sustainable transformation of most enterprises stays in the initial stage of launching environmentally friendly products. At the same time, there are only a handful of examples of significant business returns in the short term as a result of the sustainability transition. At the same time, he also believes that in general, there will be more and more actors who are involved in the sustainable development transition and innovate for a long time. Similar to AI, green is one of the main innovation directions for enterprises in the future.

Taking the home appliance industry as an example, the "Action Plan" clearly will improve the relevant standards for energy efficiency and water efficiency of household appliances, promote the certification system of green and intelligent home appliances, and guide home appliance manufacturers to increase the supply of green and intelligent low-carbon household appliances according to relevant standards, and promote industrial upgrading and green transformation of products.

Guangdong Province also said that in the future, it will strengthen the convergence of standards in key areas, and encourage enterprises and institutions to actively participate in quality standards, inspection and quarantine, certification and accreditation and other related international standardization activities. At the same time, we will carry out the pilot construction of carbon footprint certification in the Guangdong-Hong Kong-Macao Greater Bay Area, promote the improvement of Guangdong's carbon labeling mechanism, and expand the list of "Bay Area Standards" and the scope of "Bay Area Certification" projects.