On April 16th, Cui Dongshu, Secretary-General of the China Passenger Car Association, pointed out in a post that the ratio of RVs to houses has dropped to an equilibrium level of 1 vehicle for every 34 square meters of housing.
He noted that the sales of new houses from January to March 2024 decreased by 28%, providing favorable conditions for stimulating car consumption.
Currently, the ratio of car sales to real estate sales in 2023 is 37 square meters of housing to 1 vehicle, highlighting the irrationality of this comparison.
Although the ratio of RVs to houses from January to March 2024 has dropped to an equilibrium level of 1 vehicle for every 34 square meters of housing, an improvement compared to the situation where one car corresponds to 70 square meters, there still exists a significant consumption pressure, leading to sluggish demand in the automotive market due to debt pressure.
The wealth effect of the real estate market has a certain promoting effect on the demand for high-end cars. The recent decrease in real estate debt pressure and weakening housing demand have also brought some potential benefits to improving car consumption.
Given the continued high base in 2024, there is significant pressure on the growth of automobile consumption.
Therefore, we look forward to promoting car consumption by providing subsidies for scrapping and renewing vehicles, facilitating trade-ins, reducing personal income taxes for car buyers, promoting car purchases in rural areas, and encouraging marriage-related car purchases, among other improvement measures, to stimulate economic growth.
In recent years, relatively high prices of refined oil products have also been one of the reasons for the decline in automobile consumption sales.
