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In lagging sales market, used cars gain traction
By Jin Jing |
October 24, 2011, Monday
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Print Edition
Print Edition
CHINA'S second-hand car market is experiencing faster sales growth this year, making it a driving force in the domestic auto market as new car purchases slow, according to China Automobile Dealers Association.
More than 2.67 million second-hand vehicles were traded in the first eight months of this year, a 15.4 percent increase from the same period in 2010, the association said.
That pace compared with a 3 percent gain in new car sales in the eight months.
In August alone, more than 373,200 used cars were sold nationwide, up 5.9 percent from a month earlier.
"Demand for second-hand cars remains solid this year, compared with slowing new car sales," said Shen Rong, deputy secretary general of the auto association.
Still, the used-car market is viewed in a developmental stage in China.
The ratio of second-hand to new cars in China is one to three. In mature Western markets, sales of used cars are double or triple the sales of new vehicles.
Demand for the used cars comes mainly from budget-minded consumers and from car owners in those lower-tier cities where the auto industry is headed.
"We believe the used-car market still has huge potential," said Shen. "The market is just about to enter the fast track."
The association estimates that sales of used-vehicles will grow by an average 28 percent annually over the next five years.
Revenue from second-hand vehicle transactions grew 11.3 percent in the first eight months and totaled 125.9 billion yuan (US$19.4 billion), the automotive group said.
Robust business in the used-car market is attracting investment and intensifying competition.
Guangzhou Toyota recently launched a second-hand car service that allows consumers to trade in vehicles when they buy new ones from GAC Toyota's 300 authorized dealers. Dealers will provide warranties covering one year or 20,000 kilometers on the used cars and will also offer free maintenance services at 5,000 kilometers and 10,000 kilometers.
Other carmakers, including SAIC Motor and FAW Toyota, also launched similar services this year to move into the used-vehicle market.
Shen said the entry of more big-name players in the second-hand market will improve price transparency, dispel a reputation for shonky deals and enhance after-sale servicing.
He told reporters that the current trend will trigger more mergers and acquisitions among second-hand car brokers, thus forming bigger companies with a nationwide footprint and the advantages of economies of scale.
Guangdong Province in southern China, where 529,642 second-hand vehicles were sold between January and August, topped the rankings in used cars, followed by Sichuan Province, Shandong Province and the municipality of Shanghai.
More than 2.67 million second-hand vehicles were traded in the first eight months of this year, a 15.4 percent increase from the same period in 2010, the association said.
That pace compared with a 3 percent gain in new car sales in the eight months.
In August alone, more than 373,200 used cars were sold nationwide, up 5.9 percent from a month earlier.
"Demand for second-hand cars remains solid this year, compared with slowing new car sales," said Shen Rong, deputy secretary general of the auto association.
Still, the used-car market is viewed in a developmental stage in China.
The ratio of second-hand to new cars in China is one to three. In mature Western markets, sales of used cars are double or triple the sales of new vehicles.
Demand for the used cars comes mainly from budget-minded consumers and from car owners in those lower-tier cities where the auto industry is headed.
"We believe the used-car market still has huge potential," said Shen. "The market is just about to enter the fast track."
The association estimates that sales of used-vehicles will grow by an average 28 percent annually over the next five years.
Revenue from second-hand vehicle transactions grew 11.3 percent in the first eight months and totaled 125.9 billion yuan (US$19.4 billion), the automotive group said.
Robust business in the used-car market is attracting investment and intensifying competition.
Guangzhou Toyota recently launched a second-hand car service that allows consumers to trade in vehicles when they buy new ones from GAC Toyota's 300 authorized dealers. Dealers will provide warranties covering one year or 20,000 kilometers on the used cars and will also offer free maintenance services at 5,000 kilometers and 10,000 kilometers.
Other carmakers, including SAIC Motor and FAW Toyota, also launched similar services this year to move into the used-vehicle market.
Shen said the entry of more big-name players in the second-hand market will improve price transparency, dispel a reputation for shonky deals and enhance after-sale servicing.
He told reporters that the current trend will trigger more mergers and acquisitions among second-hand car brokers, thus forming bigger companies with a nationwide footprint and the advantages of economies of scale.
Guangdong Province in southern China, where 529,642 second-hand vehicles were sold between January and August, topped the rankings in used cars, followed by Sichuan Province, Shandong Province and the municipality of Shanghai.
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