Governments, used car dealers to join forces

Sales of second-hand vehicles have seen slowing growth in recent months

China's used car industry insiders called on the governments and car dealers to work together in fixing the recent slow growth in the world's largest auto market.

Statistics from the China Automobile Dealers Association show sales of the first half year stood at 6.86 million units, an increase of 3.93 percent compared to the same period last year. The growth rate a year ago was 13.11 percent.

A total of 1.24 million used cars were sold in June, increasing 17.76 percent year-on-year.

But sales of new cars have declined for 12 consecutive months. Last month, the sales reached 2.06 million, down 9.6 percent year-on-year, according to the China Association of Automobile Manufacturers. Sales from January to June totaled 12.32 million, falling 12.4 percent year-on-year.

The development of the used car market needs good policy support, said Xiao Zhengsan, secretary-general of the association.

Xiao's remarks came during the 2019 China Used Car Assembly, held in Guiyang, Guizhou province on Thursday.

"China's auto industry has developed a lot while the current tax policy for used cars was made 15 years ago," he said.

"That policy has seriously lagged behind the current situation of the industry," Xiao said.

The association submitted a letter on the adjustment of the added-value tax of the used car business to China's related government departments last month.

Early this year, the government released supporting policies to remove the transfer restriction among provinces to promote the circulation of used cars.

Xiao said one of the problems of China's used car market is a large supply stock, but small trading volume and low trading efficiency. The CADA hopes to promote used car auction events, to improve the efficiency of the businesses. At the 2019 China Used Car Assembly, the association also hosted auctions.

Luo Lei, the CADA's deputy secretary-general, said the business environment of the used car market has improved as many groups have spontaneously formed faith alliances. More platforms now use artificial intelligence and big data to establish used car pricing models and evaluation systems.

Together with the disclosure of the car's condition, consumers can feel at ease, Luo said.

Used car e-commerce platforms, a new strong force of the industry, have performed well in recent years.

According to a report of Uxin, an online used car dealership established in 2011, more than 800,000 used cars were sold last year through their platform.

The business generated 3.32 billion yuan ($482.47 million) in revenue, with a year-on-year increase of 69.9 percent. In the first quarter of this year, the volume of transactions grew to 78,277 units, increasing 39.6 percent year-on-year.

Jing Wenbing, chief strategy officer of the company, said Uxin has cooperated with traditional car dealers to allow customers nationwide to buy used cars online and enjoy local after-sale service.

Unlike the flat market for conventional used cars, used new energy vehicles sales remain strong. In the first quarter of this year, sales of used new energy vehicles reached 140,000 units, jumping 132 percent compared with the same period last year.

With the increasing number of new energy vehicles on the roads, the sector has gradually entered the replacement period, which will bring new challenges and opportunities for the used car market, Xiao said.