Used cars will become the new blue sea of consumption

2022-05-04 0 By

At a car store in Taiyuan, Shanxi Province, consumers are buying used cars as the second-hand car industry is bracing for a major boost in 2022.On January 21, the National Development and Reform Commission and other seven departments issued the Implementation Plan for Promoting green consumption (hereinafter referred to as the Plan).The plan calls for actively developing second-hand car distribution, promoting the implementation of the policy of abolishing all restrictions on the relocation of second-hand cars, and further expanding the circulation of second-hand cars.”With the implementation of various favorable policies, especially tax cuts, restrictions and other ‘blocking points’ gradually loosened, the used car market is expected to become a new blue ocean for China’s automobile consumption.”Luo Lei, deputy secretary-general of the China Automobile Dealers Association, predicted that the number of used cars traded in China will exceed 19 million in 2022, and will hit 20 million.China had 395 million motor vehicles by the end of 2021, including 302 million cars, according to data released by the Ministry of Public Security.Under the background of global economic slowdown and slow growth of automobile industry, how to invigorate the huge stock market of automobiles has become a required question in front of many parties, and stimulating the consumption of second-hand car market is undoubtedly the best answer to solve this problem.In recent years, the trade scale of second-hand car industry keeps growing.In 2021, 17.585 million used cars were traded in China, up 22.6 percent year-on-year.However, compared with developed countries, the volume of second-hand car trading is about twice that of new car trading, China’s second-hand car market still has a lot of room for development.The problem of restricted relocation has always been the blocking point that leads to the limited circulation vitality of second-hand car market.The so-called relocation restriction refers to the measures taken by some localities to limit the environmental protection standards and the year of second-hand motor vehicles from other provinces or cities, so as to avoid a large number of vehicles from other provinces entering the local market.Since 2016, the country has repeatedly demanded that the threshold for used cars not be set.In 2021, restrictions on relocation will be abolished, electronic transfer of foreign nationality will be abolished, and sales value-added tax will be reduced.The circulation convenience policy introduced by many departments makes the second-hand car industry “spring breeze”.The “plan” proposed to fully cancel the second-hand car relocation policy, is seen as a “booster” to promote the development of second-hand cars in the industry.”Invigorating the second-hand car trade will not only drive new car consumption, but also promote the sequential use of vehicles and improve the efficiency of resource utilization,” said Wang Bin, deputy director of the ministry’s market operation and consumption promotion department.As the restriction policy is gradually loosened, the consumption potential of second-hand cars will be further released.Chinese automobile circulation association, shen into a circulation of 2021 China’s auto industry development in recently revealed on BBS, at present, relevant departments are studying to formulate optimization used cars move is registered, the specification used car sales management, develop the used-car dealership business, get through the wall of the used-car market points and weaknesses, relevant policy once published,It will inject new vitality into the development of the second-hand car market, and the circulation of second-hand cars will be as convenient as the circulation of new cars, creating a larger market space for new car consumption and promoting the sustainable development of the whole car market.Policy promotion and market dividend make more businesses optimistic about the second-hand car market.At the end of 2021, Ehi Car Rental announced the launch of used car retail business, allowing cars to be rented or sold in offline stores.Data from Tianyan show that there are more than 600,000 auto dealers in China whose business scope includes second-hand cars. Among the used-car enterprises that are in operation, existing, moving in and moving out, 22% have been established within one year, and more than half have been established between one year and five years.Now, some of the better brands can stand at 2 new cars for every used car in their stores.Audi, FAW-Volkswagen, Lincoln, Geely and other brands have set up independent used car showrooms one after another, and more brands will follow.Due to the impact of COVID-19, offline second-hand car stores have become increasingly difficult to operate.However, in Beijing Changping do used car business “after 90” Kang Yue, with online drainage, the volume of offline stores does not fall to increase.The blogger, who has 1.817 million followers on Weibo, said that after shooting the video at night and Posting it online, customers immediately come to negotiate the price. After the price is settled, logistics can be called to deliver the goods the next day.As Kang Yue, as a result of customer consumption habits change, the second-hand car industry are actively seeking change.Not only small and medium-sized second-hand car dealers are deeply exploring online promotion and trading, but also second-hand car e-commerce platforms such as Guazi Second-hand car have begun to fully online transformation.In 2021, Guazi Yanxuan, a self-run car company of Guazi, completed the switch of e-commerce mode with more than 6,000 registered car dealers.Guazi used car stores in cities nationwide were adjusted to urban warehouses, and all offline sales and service personnel were transferred to online stores.In the opinion of Yang Haoyong, CEO of Car Duo Duo Group and founder of Guazi Second-hand car, China’s second-hand car industry is ushering in a historical opportunity to win the trust of consumers, and the second-hand car industry will evolve from the traditional model based on transaction to the modern model based on comprehensive services.The new e-commerce model of second-hand cars has realized more and better vehicle supply, higher turnover efficiency and more comprehensive user protection.From the international market, the trend of second-hand car e-commerce is becoming more and more obvious.Developed second-hand car markets in Europe and the United States have been transformed into e-commerce, and e-commerce car buying experience is widely recognized by users.Since the COVID-19 outbreak in 2020, the e-commerce online car purchase model has increasingly become the mainstream of the used car market in Europe and the United States.The essence of industry upgrading and mode iteration is to improve industry efficiency and create user value.The e-commerce model, which actively provides users with extreme experience, is expected to become a popular model in the used car industry.In 2021, the growth of second-hand car market is obviously better than that of new car market, but new energy second-hand car has become an exception.There is even a saying in the used-car market that “electric new cars are a treasure, nobody wants them in the used-car market, the battery is so bad that I have to pay money to replace them”.Even in Beijing’s most famous used vehicle market, Huaxiang used car market, it is difficult to see the figure of new energy vehicles, only a few cars, prices are “miserable”.When the reporter asked why do not accept new energy vehicles, second-hand car dealer Xiao Long repeatedly waved his hand, “do not mention, before receiving a Tesla, two months did not sell out, then lost tens of thousands of dollars to throw out.””It’s not practical to buy a second-hand new energy car, but a new one is more attractive.”Consumer Mr Wang tells a reporter, a few years ago the production of new energy vehicles short mileage, low security, after the use of power battery attenuation is more obvious, and now the new breed of new energy, long endurance, quality is more guaranteed.Car dealers do not touch, consumers do not recognize the crux of the new energy second-hand car, mainly in the power battery.Insiders told reporters that the new energy second-hand car market is not mature and standardized, which is one of the main reasons for the low retention rate of new energy second-hand cars.To solve this problem, on the one hand, car companies need to improve the technical performance of power batteries to achieve longer use and smaller attenuation, and at the same time, it is necessary to establish a sound technical standards and evaluation system, which is an important focus to promote the new energy second-hand car market to become active.At present, domestic new energy vehicle enterprises are also making exploration and efforts to solve the value preservation problem of second-hand cars. For example, NIO has released the second-hand car business system.Saic has set up a used car certification center to provide used car owners with value preservation and repurchase business, and select new energy used cars for sale.However, it remains to be seen how effective these new models will be.Although the new energy used car is really a little “cold”, but looking to the future, this field has broad prospects for development.Shen jinjun believes that, in a comprehensive view, the production and sales of traditional fuel vehicles have basically peaked, and the future may be a trend downward, while new energy vehicles will maintain high-speed growth, and gradually beach fuel car market.Liu Xiaoshi, executive deputy secretary general of China Electric Vehicle Association, also analyzed that with the increase of electric vehicles, the second-hand transaction volume of electric vehicles will also increase significantly, and is expected to reach 200,000 or even higher by 2025.There is no doubt that the used car market continues to stimulate the consumption potential of residents.China’s annual used-car transaction volume accounted for 0.67 of new car sales in 2021, a record high.In the New Year, it is worth looking forward to how each main body of the second-hand car industry will share the dividend of market growth by improving its management ability, operation ability and service ability.Source: Economic Daily Published: China Economic and Trade Rule of law media Center Edited by: Xiaomin