China’s used-vehicle industry is expected to experience robust growth in the coming years thanks to a series of favorable policies aimed at facilitating the circulation of used cars alongside continued efforts by online used-car dealers to strengthen online transactions by improving the supply chain system, according to industry experts. said.
The China Automobile Dealers Association said a total of 17.59 million used cars were sold in China in 2021, up 22.62% year on year, with the transaction value reaching 1.13 trillion. yuan ($159.2 billion), up 27.32%.
The country’s used car sales saw continued growth during the April-August period, the association said, pointing to the recovery in demand in tier-one cities and neighboring areas as the country accelerated measures to facilitate the interregional transfer of used vehicles.
China will implement a series of stimulus measures such as removing unreasonable regulations on used vehicle sales and boosting the circulation of used vehicles as part of its broader efforts to boost consumption of cars, according to a notice issued by the Ministry of Commerce and 16 other central government departments in July.
China is the world’s largest used car market and the largest automobile manufacturer. As a growing number of consumers shift their preference to online shopping modes, used car sales platforms including Uxin Ltd, Guazi and Renrenche are betting big on this booming segment.
Uxin has invested heavily in improving its used car offering, particularly in vehicle acquisitions, inspections and reconditioning.
“We have set up acquisition channels to buy used cars from individual consumers, auction platforms, car manufacturers and car dealerships,” said Dai Kun, chairman and CEO of Uxin. .
Direct purchases from individual consumers accounted for more than 30% of total vehicles acquired by the company in the fourth quarter of 2021, and the growing proportion of such direct purchases is helping to further reduce acquisition costs, Dai said.
The company has expanded its presence in the offline used car market by opening two vehicle inspection and reconditioning centers – a type of warehouse superstore – where customers can have a direct in-store experience like the visit, selection, consultation, test drive and purchase, in Xi’an, Shaanxi province and Hefei, Anhui province.
Uxin said its revenue rose 148.9 percent year-on-year to 1.6 billion yuan for the fiscal year ending March 31, while trading volume reached 15,755 units, up 49 .1% compared to 10,566 units.
Dai said the used car industry is an integral part of China’s circular economy, and the circulation of used cars plays a vital role in reducing production waste, reducing pollution and improved use of resources.
Internet-based sales channels can overcome geographical restrictions of used car trade so that consumers can easily choose high-quality and low-priced used vehicles.
“The Chinese used car market is experiencing a golden age of growth. The country has become the world’s largest auto market in 2021, with over 17 million used vehicles sold, and has huge growth potential compared to developed markets,” Dai added.
He said the company will upgrade its supply chain information system, artificial intelligence-based pricing system and intelligent inventory management system to continuously optimize operational efficiency and to control costs.
Cui Dongshu, general secretary of the China Passenger Car Association, said the latest efforts to remove unreasonable restrictions on used car dealerships will give a strong boost to the circulation of used vehicles, improve the rate resource utilization and further unlock consumption potential. such vehicles.
Guazi, a used-car platform of Beijing-based online car trading company Chehaoduo, said its online transactions saw rapid growth in August and about 50% of car dealers in cities of Zhengzhou, Shenzhen, Nanjing and Hefei have shifted to online channels to expand used car sales.
The company combines deep big data analytics and artificial intelligence technology to implement standardized valuation and smart pricing mechanisms for used cars.
In June 2021, Chehaoduo announced that it had closed a new round of financing worth $300 million, led by H capital. Sequoia Capital China and IDG Capital also participated in the financing. It has raised nearly $4 billion in the past nine funding rounds.
Luo Lei, deputy secretary-general of the China Automobile Dealers Association, said the used-car market will continue to grow as issues that impede the circulation of used cars, such as transfer restrictions between provinces and value-added taxes, are being gradually resolved. .