Retirement New Deal will be implemented

The website of the Ministry of Commerce formally announced on January 14 the new "Standards for Mandatory Scraping Standards for Motor Vehicles", which will be formally implemented on May 1, 2013.

One of the most significant changes from the comparison of the requirements for scrapping of motor vehicles and the “Regulations” before the introduction of the new “Regulations” is that the new “Regulations” has eliminated the requirement for delayed operation of expired vehicles, which means that they are due. Motor vehicles will be scrapped. Although the new “Regulations” relax slightly in terms of the age and mileage requirements, cancelling the extension of the operation will very clearly plug the overdue motor vehicle's delayed operation, thus speeding up the scrapping of motor vehicles.

The "Rules for Mandatory Scraping of Motor Vehicles" is the basic law of the recycling industry for scrapped motor vehicles and is the cornerstone of the development of the entire industry. The promulgation of the “Regulations” will pave the way for the follow-up of relevant industry policies and greatly increase the possibility of follow-up policies introduced in 2013. With the continuous improvement of relevant laws and regulations, we believe that 2013 will become the “first year” of China's end-of-life dismantling industry.

Since 2000, the Chinese auto industry has gradually entered the stage of prosperous production and sales. Usually, the scrapping time of automobiles is 10-15 years. Therefore, in 2015, China will usher in the first peak of auto scrap. At present, the annual waste of automobiles in developed countries is usually 6-8% of the vehicle ownership. According to the 6% ratio, the 2015 annual report of China's annual waste car volume is expected to reach 10 million, and in 2020 it will reach 15 million.

We believe that 2013-2015 will be the concentrated production capacity building phase of China's end-of-life vehicle dismantling processing industry, and related equipment will become the vanguard of the industry's great development and take the lead in enjoying the vast market brought about by the industry's great development. Calculated according to the newly added 8 million dismantling processing capacity, the market capacity of the corresponding dismantling equipment exceeds 7 billion yuan, the market capacity of broken equipment exceeds 4 billion yuan, and the market for 10 billion equipment will soon be ignited.