A nine-item action plan on promoting automobile consumption was unveiled on Wednesday by the municipal government of Shanghai, with an aim of raising the trade volume of the city's secondhand vehicle market to 900,000 units by 2027 and doubling the export of pre-owned cars from 2023 levels, according to official sources.

"Considering the auto sector's long industrial chain and huge market scale, it has major impact on economic stabilization and consumption growth," said Liu Min, deputy director of the Shanghai Municipal Commission of Commerce.

"Aligning with the central government's trade-in policies in consumer products and following sophisticated international experience, it is hoped the action plan accelerates the elimination and renewal of vehicles and improves the auto market structure. The plan will be constantly optimized in accordance with implementation conditions," Liu said.

Liu added that the nine items cover three broad aspects: encouraging demand by offering subsidies or incentives, innovating secondhand car circulation and upgrade, and optimizing the market environment.

"China's State Council released an action plan in March to initiate large-scale equipment upgrades and trade-ins of consumer goods, vowing greater support to promote the upgraded consumption of automobiles," said Zhu Bingxin, an official with the Shanghai Municipal Commission of Commerce's marketing department.

The action plan has set ambitious targets for trading and exporting secondhand vehicles. As many as 900,000 units of secondhand vehicles are expected to be traded across Shanghai by 2027, a growth of 50 percent from that of 2023. In the meantime, the city hopes to double its used car exports to 15,000 units in 2027 from 2023 levels. Furthermore, the amount of scrapped vehicles getting recycled is expected to reach 50,000 units, doubling from 2023 figures.

To achieve such goals, the action plan encourages the setup of secondhand car dealerships, supports vehicle manufacturers to carry out trade-in services, backs the formation of the pricing evaluation system for used vehicles, and promotes the facilitation of secondhand car circulation.

"In developed countries, many used cars are exported, so will Shanghai. With China becoming one of the largest automotive production and consumption bases, there will be sufficient secondhand vehicles for export. This is also in line with the goal of optimizing resources," Liu said.

Liu added that the auto sector, just like any other consumer market, has entered a new phase of transformation and upgrade.

"Currently, 30 percent of new vehicle consumption comes from updating requirements, and that of new gasoline-powered cars accounted for 50 percent, which means we have entered the era of upgrading consumption.

"Therefore, our policies need upgrade, our industry development needs innovation and our environment needs optimization. Both of our systems and our industry development should catch up with the times," Liu said.