Used Cars in China

The sales volume of used cars in China is estimated to have a compound annual growth rate at 16.5% from 2014 to 2017. The transaction volume is projected of reaching 9.57 million in 2017 according to ReportsnReports.com. With the increase of car ownership and the slowdown of economy, Chinese used car market has been developing rapidly. In 2013, 5.20 million used cars were traded in China, up 8.6% year over year. This amount is 1.9 times as that in 2008, which creates a turnover of 291.6 billion RMB. Although right now most Chinese car-owners have only owned one car ever in their life, but based on the projection on the improvement of living standard, consumers will change their cars every 5-6 years, China will step into the car-replacement peak in 2014, and the used car market will rocket in accelerated growth.

In one of CNN’s coverage of China’s used car markets, a used car dealership(individual) that sells about 5 cars a day just sold a 2006 VW Jetta for $11,000. Car dealership is never about telling the truth. The market is just starting up: with most of the car dealerships in China with relatively small inventories(10-15 cars), consumers are having problems seeing clearly in the market. Personally I think it will take some time for the price comparison to ease up for the consumers as the market develops.
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On a side note, cars in China typically cost 2-3 times more than they do in the US, that also does not include various extra fees such as license plate. For example a Shanghai license plate normally cost around 15,000 USD. A new 2012 Ford Focus would cost about 12,000 USD in the States while it is 25,000 USD in China.

Source: CNN on China used car market

2 comments to Used Cars in China

  • Peter Wittwer

    It’s very interesting to look at the increase in price of the Ford Focus in comparison to the American market and the Chinese market. A 15,000 dollar car represents an affordable automobile for any car consumer. Although the Chinese economy is developing and more and more people are beginning to form a middle class, it’s hard to believe the average consumer in China is willing to purchase a brand new 25,000 dollar fusion as well as a 15,000 dollar license plate. That makes it 40,000 dollars to purchase a fairly bottom of the market car as a new car buyer. However, the used car market represents a much more affordable method for Chinese consumers to buy an affordable car. Although it may take some time for used car dealerships to build up inventory, moving forward I feel like the purchasing of a used car is definitely more cost feasible for the average Chinese person, than buying a brand new car.

  • Louis Ike

    I am curious to see how the used car market develops and if indeed the prices of cars in china fall to respectably comparable levels (as in not 2 to 3 times the going rate in the rest of the world). I have read recently that the growth in China will be slowing down somewhat, but that this is good news as it represents a slow-down of minimum wage low skill jobs and a growth of of better pay jobs. The growth in the higher paying jobs will help to foster a middle class in China that will be capable of purchasing vehicles and other amenities perhaps stimulating both the used and new auto markets.

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