【英文】麦格理报告：中国汽车2020展望：缓慢复苏之路China autos 2020 outlook – slow lane to a full recovery（21页）

Fiscal pressure limits subsidy-type of polies: We see less chance for the government to release supportive policies that require intense fiscal support, such as purchase tax cut or direct cash  subsidies. The main reason is the fiscal pressure that the government is facing in the context of tax  reform and slower economy growth. In addition, subsidies like the previous rounds of supportive  policies (say 50% purchase tax cut or the equivalent of ~4% of the MSRP of a vehicle) may not  help that much – consumers would have placed orders in 2Q19 if they are waiting for ~5% more  discounts before purchasing cars as discounts expanded substantially back then when the industry  focused on the destocking of vehicles under the old emission standards. Potential distortion to the  industry is another concern.

We continue to like premium and stronger JV brands as key beneficiaries of the rising replacement  demand, favourable demographic trends and potential relaxation of license plate restrictions. We are  concerned about increased competition in the lower-end segments and would turn more positive when we  see a major recovery of demand from lower-tier cities. We are cautious on the NEV sector, considering the  negative impact from the continued subsidy cut for the whole industry and the lack of individual demand. 

Wealth allocation: The fact that disposable income growth for high-income groups has  outperformed other income levels also supports demand for higher-end cars. IMF (Sonali et. Al  (2018)) expects aging and urbanization to likely drive the inequal allocation of wealth higher. In the  longer term, it takes a full range of policies such as tax reform, expenditure increases and  redistribution to reduce inequality. We would expect to see continued income growth strength in  higher-income groups, boding well for higher-end vehicle demand.