Analysis of the Chinese used vehicle market
- China's used vehicle trade volume increased 2.3% in 2015 compared to the previous year to 9.42 million units according to China Automobile Dealers Association. Nevertheless, the ratio between new vehicle sales volume and used vehicle trade volume is still 2.61 : 1. China's market scale is only about 20% of that of the United States, which has a mature used vehicle market, which means there is still room for development.
- By taking into consideration environmental protection and tax revenues, local governments (in particular cities) have implemented restrictions on the inflow of used vehicles from outside. These restrictions have been however considered as a major factor in the slow development of China's used vehicle market. In March 2016, the General Office of the State Council issued the "Opinions on Facilitating Used-Car Trading." The Opinions requires local governments to lift any limits on inflows of second-hand vehicles from other regions, except three densely urbanized areas which face serious air pollution. Out of 299 cities which implemented restrictions on used vehicle inflow from outside, 183 cities already abolished such measures as of October 2016.
- Looking at the used vehicle market by region, trade is most active in east China, accounting for 32.4% of the national total. In particular, Guangdong province accounts for 9.98% or one tenth of the national total, making it China's largest used vehicle market. As for vehicles by type, basic passenger cars make up over 60% of the market. Second-hand commercial vehicle trade has been gradually shrinking due to stricter emission regulations and dull performance of the overall truck market. Although the composition ratio of SUVs and MPVs is increasing, their scale remains small.
- As for vehicle age, vehicles used for 3-6 years are in high demand, accounting for some 70% of all trade. For the first six months of 2016, the two most popular models are the Wuling Sunshine and GM Cruze. Meanwhile, the top 10 models account for 15,6% of all used vehicle trade.
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