Different from the production and sales drop of new cars, the used-car market in China shows a steady rising trend. According to statistics of Chinese Automobile Circulation Association, from January to May, 2011, the trading amount of the used cars in China rose slightly compared to the one in the same period of last year and generally the market operated stably. Totally 1.581 million used cars were traded in 31 provinces, zones and municipalities, increasing by 12.09 percent year on year. Among them, the trading amount of the used cars reached 352,900 in May with the average trading price RMB 45,900 yuan, rising 0.44 percent month on month.
Among the trading amount of 1.581 million cars, there were 840,000 basic passenger cars (sedans), rising 11.22 percent year on year, with the trading volume RMB 39.792 billion yuan; 253,500 buses, increasing 11.32 percent year on year, with the trading volume RMB 9.534 billion yuan; 258,800 trucks, growing 8.31 percent year on year, with the trading volume RMB 9.376 billion yuan; 26,600 SUVs, increasing 20.91 percent year on year, with the trading volume RMB 3.742 billion yuan.
Compared with new car sales, it is not long for the development of the used-car market in China, but it enjoys a high-speed development. In 10 years from 2000 to 2009, the trading amount in the used-car market rose from 251,700 to 3.3386 million, which increased 13 times of the one previously. In recent years, operation modes like used-car broker, used-car auction and used-car replacement business came out successively in the market. The upgrading of trading modes provides new drive for the development of the used-car market in China.
In the international mature auto market, the sales of used cars are almost 3 times of the ones of new cars. However, it is just the opposite one in Chinese auto market. Arthur D Little, the world famous consulting enterprise, made a report previously that the ratio of the used-car supply to in China in 2010 was only 0.22. However, the Chinese used-car market keeps growing quickly and the composite annual growth rate reached 25 percent from 2006 to 2010. Chinese consumers have began accept and purchase the used cars gradually. The used-car market in the future will meet a higher growth rate.
In the Chinese used-car market, there are mainly domestically-made cars purchased mainly by individuals. According to the data, the trading amount of domestically-made used cars reached to 1.5164 million from January to May 2011, accounting for 95.91 percent of the total trading amount. 1.34 million cars were purchased by individuals. In the east area with fast economic development, the used-car market was much active with a large trading amount; but in the west with low economic development, there was a small trading amount. Such a regional market characteristics further expanded the potential space for fast growth of the used-car market and became a new support point for the development of the used-car market.
At the same time, complete vehicle manufacturers also attach importance to the development of the used-car business and they mainly rely on their dealer network to conduct. Especially under the prerequisite of gradual slowdown of new car sales this year, complete vehicle manufacturers began to make more efforts, strengthen dealer training, give more policy supports in the aspect of used-car replacement and innovate the business modes. Volkswagen made an active action to cooperate with CATC to establish "Used-car Wholesale and Distribution Center" and introduced its used-car brand Das WeltAuto into the Chinese market; FAW Toyota also cooperates with Beijing Used Vehicle Trade Market to carry out "instant auction for replacement" of the used cars.
Insider makes an analysis that presently, most used-car dealers in China, in their initial stage, are faced with car source shortage, lack of used-car talents and other problems. Compared with the used-car replacement rate of 40 percent to 50 percent in foreign countries, there is still a huge growth space. And for new car business, replacement in the future will become an important way to win customers for the second purchase.
We should see that the used-car market is still in the development stage in China. It is faced with a lot of challenges, but also owns a huge potential and its healthy development still needs a joint effort by multiple parties.
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