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while the “trade-in” policy has boosted new car sales, it has also stimulated the vitality of the used car market. on september 3, cui dongshu, secretary general of the passenger car market information joint branch of the china automobile dealers association, said that with the promotion of the national “trade-in” policy, the domestic used car market has flourished and has huge market potential. according to data released by the china automobile dealers association (hereinafter referred to as the “circulation association”), the transaction volume of the used car market in july this year increased both year-on-year and month-on-month. the prices of used cars, which were caught off guard by the price cuts of new cars this year, have also begun to pick up. in cui dongshu’s view, with the release of the national scrapping and renewal policy in july, the used car business and automobile scrapping and renewal of automobile dealer groups will flourish, and the development potential of the used car market is extremely huge. this year’s “trade-in” phased goal will inevitably be achieved.

market demand recovery

the "sudden" new car price war at the beginning of this year affected not only the trend of the new car market, but also affected the used car transactions. driven by the "old for new" policy, the used car market has been reactivated.

data shows that in the first seven months of this year, the cumulative transaction volume of used cars reached 10.9923 million, a year-on-year increase of 6.3%. among them, the transaction volume in july was 1.6094 million, a month-on-month increase of 5.95% and a year-on-year increase of 2.37%. in june this year, the transaction volume of used cars fell by 0.93% year-on-year and 4.14% month-on-month.

when asked about the reasons for the increase in used car sales in july this year, lu guangzhi, deputy director of the information department of the circulation association, believed that it was mainly due to the promotion of the scrapping and renewal subsidy policy and the strengthening of the car trade-in policy. "from a seasonal perspective, the frequent high temperatures and extreme weather in july had a significant impact on the offline customer flow in the used car market. the used car market was in the off-season in july, but the 'trade-in' policy promoted the demand for used cars," he said.

with the increase in market demand, the inventory status of used cars has been significantly improved. according to statistics, in july this year, the inventory of used cars over 30 days accounted for 36%, and the inventory of used cars between 15 and 30 days accounted for 51%. "in july this year, the average inventory cycle of used cars was shortened to 54 days, a decrease of 2 days from the previous month." cui dongshu said that the operating pressure of used cars is gradually improving.

the second-hand car market is picking up, and the feeling is even more obvious among the end car dealers. sun li (pseudonym), who has been running a second-hand store for many years, clearly feels that the circulation of second-hand cars has accelerated. sun li told the beijing business daily reporter that the implementation of the "old for new" policy has released the demand for old car owners to buy cars, and the number of consumers visiting the store has increased significantly recently.

"last week, the store just bought a 2019 mercedes-benz a-class four-wheel drive model, and it was sold in just two days. in the first half of this year, it took at least 1-2 weeks from the purchase of a new car to the sale of the same model." sun li said that the store's operating status in the first half of this year was to be cautious in buying cars. generally, the store would start looking for related car sources only after finding potential consumers to avoid occupying too much funds. but as the market situation picks up, the store began to increase its efforts to buy cars.

the policy not only boosted offline transaction volume, but also promoted the increase in online vehicle sources, bringing more high-quality vehicles to the used car market. "in august this year, the online vehicle source volume reached 704,000 vehicles, and in july, the online vehicle source volume was 667,000 vehicles." li ming, director of the data department of jingzhengu, told the beijing business daily reporter that the reason behind the month-on-month increase in online vehicle sources was mainly due to the increase in overall transaction volume driven by replacement and "old for new", and the overall effect was quite obvious. in li ming's view, subsidies can further expand the scale of the used car market. at present, the overall transaction of used cars emphasizes high-end transfer, which also speeds up the overall circulation speed.

terminal price rebound

since last year, the new car market has been in a price war, causing the second-hand car market to continue to fall. data shows that the average transaction price of a second-hand car last year was 64,100 yuan, a year-on-year decrease of about 2,000 yuan.

however, under the influence of various factors such as the activation of demand for used cars and the gradual stabilization of new car market prices, the prices of used cars have also adjusted back. "the transaction price of used cars has stabilized." lu guangzhi revealed that the average price of used cars in july this year was 65,100 yuan, a slight increase of 700 yuan from the previous month.

with the price adjustment and inventory decline, used car dealers began to step up the collection of car sources to stabilize the inventory balance in the second half of the year. among them, second-hand cars and high-quality second-hand cars have become the "highlights" of second-hand car dealers. "compared with old models, some consumers are more concerned about second-hand models with short mileage and good condition. the price increase of such models is also more obvious." a used car dealer gave an example, saying that a gac ​​toyota camry with only 20,000 kilometers in 2022 is currently bought at a price of about 123,000 yuan in the store, and the sales price is about 130,000 yuan, with a profit margin of about 5,000 yuan. the same model, the purchase price in the first half of this year was about 119,000 yuan, superimposed on the long storage time, it is not easy to avoid losses.

beijing business daily reporters learned from several second-hand car dealers that high-end and mid-range models in good condition are the most popular among consumers, and higher prices can also provide profit margins for second-hand car dealers. data released by the circulation association showed that in july this year, second-hand cars with a service life of 3 to 6 years accounted for 46.66% of the total transaction volume, a month-on-month increase of 2.42% and a year-on-year increase of 2.94%.

although the "trade-in" policy has released some demand in the used car market, due to the limited supply of second-hand cars and high-quality used cars in good condition, a "car war" has also taken place among used car dealers. a second-hand car dealer manager told the beijing business daily reporter that consumers generally change cars every 4-5 years, so second-hand car dealers generally purchase models that are more than three years old. the supply of 1-3 years old nearly new cars is limited, and they are also the target of competition among second-hand car dealers.

in addition, beijing business daily reporters learned from the used car market that the profit of used car dealers trading used cars individually is not high, usually only about 2,000 yuan. the above-mentioned used car dealers admitted that previously affected by the price war of new cars, used car dealers generally chose to cut prices to clear inventory, and many car dealers were in a loss-making state. after the release of market demand, the price increase has led to an increase in the profit of each car, which is also an important reason why various used car dealers began to scramble for car sources.

it is worth mentioning that local governments have added more subsidies on the basis of the national "old for new" policy, which will help the second-hand car market continue to grow in transaction volume. among them, in august this year, the beijing development and reform commission and the beijing finance bureau jointly issued the "notice on issuing the implementation plan for beijing to increase support for equipment renewal and consumer goods trade-in", which proposed to support the replacement and renewal of personal passenger cars, individual consumers transfer passenger cars registered in beijing for more than one year, and purchase new energy passenger cars from sales companies in beijing, with a subsidy standard of 15,000 yuan per car. yan jinghui, a member of the expert committee of the circulation association, believes that this replacement and renewal policy will further stimulate the potential of the new car market and also play a role in boosting the second-hand car market. more models will flow into the second-hand car market, giving consumers more models to choose from.

new energy vehicles become a breakthrough

while second-hand cars and high-quality used cars have become the "new favorites", new energy vehicles have also become an incremental transaction point for many used car dealers.

data from the circulation association shows that in the first seven months of this year, the transaction volume of new energy second-hand cars increased by 61% year-on-year. among them, the transaction volume of new energy second-hand cars in july reached 89,800 units, a month-on-month increase of 4.4% and a year-on-year increase of 48.3%. according to the "2024 china youth consumption trend report", 56.3% of the young people interviewed considered buying new energy second-hand cars.

in the view of deng xinda, founder of beijing ruikaxin group, the increase in the transaction volume of used new energy vehicles is due to the improvement in consumers' awareness of new energy vehicles on the one hand, and the substantial increase in the number of new energy vehicles in recent years on the other. as more models enter the replacement cycle, the liquidity of new energy vehicles in the used car market has also increased.

"previously, due to factors such as driving range and battery life, consumers were relatively resistant to used new energy vehicles. however, with the abundance of plug-in hybrid and extended-range models in recent years, sales of new energy vehicles in the used car market have gradually increased, and more used car dealers are willing to purchase used new energy vehicles." a used car dealer said that after the "old for new" policy was implemented, many consumers came to the store to look at new energy vehicle models, among which models such as tesla and ideal were more popular.

a person related to guazi used cars said that the notice on "several measures on further supporting large-scale equipment updates and trade-in of consumer goods" was issued in late july this year. the increase in subsidies will stimulate consumers' enthusiasm for car purchases and promote the replacement of cars, making the car purchase needs of many potential users come true, and the overall consumption of new energy used cars will be boosted.

in addition to the overall increase in market demand driven by the "old for new" policy, the transfer rate of used cars across the country has also increased significantly. data shows that in july this year, the transfer rate of used cars was 28.98%, a month-on-month increase of 0.56% and a year-on-year increase of 1.33%. a person in charge of a used car dealership told the beijing business daily reporter that the policy stimulated the increase in market demand. many cities with large transaction volumes have geographical advantages, which are suitable for vehicle relocation or relocation, thus driving the growth of transaction volume. "the used car industry has a strong source of vehicles. as first- and second-tier cities are gathering places for high-quality vehicle sources, the increase in market demand will drive the circulation of high-quality vehicle sources across the country, fully release the potential of automobile consumption, and drive the upgrade of automobile consumption." he said.

beijing business daily reporter liu xiaomeng