A visitor tries out a new energy vehicle during an auto expo in Hohhot, Inner Mongolia autonomous region. DING GENHOU/FOR CHINA DAILY
China unveiled on Tuesday a list of 40 pilot cities for automobile consumption-boosting initiatives, a move aimed at removing unreasonable restrictions and cultivating new consumption scenarios that integrate commerce, tourism, culture and sports.
Under the program, participating cities will pursue reform and innovation in areas including automobile modification, second-hand vehicle circulation, recreational vehicle camping, auto racing events, car rental services, and scrappage recycling, according to a notice jointly issued by the Ministry of Commerce and seven other government departments.
The pilot cities including Beijing and Shanghai will each focus on distinctive reform priorities tailored to local industrial characteristics, market conditions, resource endowments and functional positioning.
With vehicle ownership reaching 370 million units and sales ranking first globally for 17 consecutive years, China has firmly established itself as an automotive powerhouse, Vice-Minister of Commerce Sheng Qiuping said at a news conference.
“As the automotive market evolves, the nature of the vehicle itself is changing,” Sheng said. “Cars are transitioning from pure transportation tools to intelligent mobile living spaces, a shift that is opening vast opportunities in the automotive aftermarket.”
In particular, Sheng noted that passenger cars aged seven years or older in China now account for more than 50 percent of the fleet, signaling the start of a period of rapid aftermarket growth. This age bracket typically marks the point when routine servicing gives way to more extensive repairs, component replacements and system overhauls.
China’s auto aftermarket, encompassing parts, maintenance, repair, accessories, camping and automotive services, was estimated at 1.7 trillion yuan ($250 billion) last year, according to a report by market consultancy iResearch.
The policy push to boost auto consumption came as retail sales in the sector plunged 16.1 percent year-on-year in May, with the decline widening by 0.8 percentage points from April, the sharpest drop among all major retail categories.
The plunge deepened the drag on an already fragile consumption recovery, as the phaseout of new energy vehicle tax incentives and consumer demand pulled forward by last year’s trade-in program collided with weak household sentiment, said Wang Qing, chief macroeconomic analyst at Orient Golden Credit Rating International.
According to the National Bureau of Statistics, the decline pulled total retail sales of consumer goods into negative territory for the first time since December 2022, with the figure falling 0.6 percent year-on-year to 4.1 trillion yuan.
Chinese automakers are stepping up efforts in both technology and service to attract potential car buyers.
In late May, BYD became the first major carmaker in the world to compensate users for direct losses caused by accidents while using its urban navigation-assisted driving system. The Shenzhen-based carmaker said users of its God’s Eye A, God’s Eye B, and God’s Eye 5.0 assisted-driving systems will be covered for one year while the urban navigation function is used in compliance with system rules.
The compensation will cover direct economic losses that should be borne by the vehicle, including repair costs, third-party property damage and personal injury liabilities.
Unlike typical assisted-driving insurance products offered in the market, BYD said its coverage program will be free, carry no compensation cap and will not affect users’ future insurance premiums.
Others are keeping their vehicles as new as possible. Nio rolled out an upgraded version of its world model-based smart driving system on June 18, available for more than 700,000 of its vehicle owners to update. That means their vehicles sold four years ago are also eligible for the update free of charge.
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