Revised government policies spark surge in used vehicle market

China's used vehicle sales surged 15.6 percent year-on-year in the first half and are expected to see further growth over the rest of the year.

About 8.77 million used vehicles changed hands in the country during the period, with a total transaction value of 551.73 billion yuan ($77.03 billion), data from the China Automobile Dealers Association released last week showed.

In June alone, around 1.53 million used vehicles were traded in China, up 8.24 percent year-on-year. The transaction amount reached 97.35 billion yuan.

The Ministry of Public Security has implemented a policy that simplifies the registration process for secondhand cars since June.

It allows applicants to use their resident identity card when transferring ownership of small noncommercial passenger vehicles outside their registered residence, eliminating the need for temporary residence permits.

The CADA said that the policy greatly simplifies the registration procedures and has contributed to a slight recovery in the market.

The association predicts that the domestic secondhand vehicle market will reach a milestone 20 million units this year. The annual transaction volume has never exceeded 17 million units so far.

Xiao Zhengsan, secretary-general of the association, said that the confidence in the resurgent market stems from the policy support.

During a recent regular policy briefing by the State Council, it was emphasized again that restrictions on used car transfers would be abolished to create a favorable environment for the market and remove barriers for consumers.

From Jan 1, individuals are not allowed to transfer more than three vehicles within a year, which is crucial in driving the secondhand vehicle market toward organized and quality-oriented development.

Xiao said that the introduction of these policies has laid a solid foundation for the standardized and scaled development of the secondhand vehicle industry.

Tian Tian, deputy secretary-general of the CADA, said that compared to the global auto market, China's secondhand car market has untapped potential for growth and increased market penetration, with trust and credibility being crucial factors.

During the 2023 China Used Car Assembly in early July, the CADA released a set of standards for secondhand vehicle dealership services.

They outline requirements for service, sales management and service improvement in secondhand car dealerships. The standards aim to address the shortcomings in the transaction and usage processes of secondhand vehicles.