Chinese drivers are buying more used cars
February 19, 2019 Category China News Round-up, Weekly
Chinese consumers, who created the world’s largest automobile market in a generation, are discovering that new is not everything. They are increasingly buying second-hand cars, eschewing first-hand models, as economic growth in China weakens to its slowest pace in decades and an ongoing trade war with the United States spills over into uncertainties about investment and job prospects. Consumer confidence in second-hand cars is also being boosted by an evolving ecosystem of financing, used-car dealerships, better ownership data and insurance.
A decade ago most Chinese drivers did not want to buy a second-hand vehicle, but trends are changing. Transactions involving new cars fell by 2.8% in 2018 to 28.1 million units, while sales of second-hand vehicles jumped by 11.5% to 13.8 million units. The ratio of second-hand vehicles to new models stood at 49.1%, a 6 percentage point growth over 43% in 2017, according to the China Automobile Dealers Association (CADA). In the United States, in comparison, sales of used cars far outnumber purchases of new vehicles and this trend has been on the rise in recent years.
The increasing popularity of second-hand cars at home could mean trouble for Chinese carmakers, spurring them to look for export markets in which to sell some of the 28 million cars and trucks that roll off assembly lines every year. Last year, China exported 1.15 million passenger cars and commercial vehicles, an increase of 11.3% from a year earlier, according to the General Administration of Customs. This export volume represents about 4% of the country’s total automobile output. China is – by far – the world’s largest car market, producing about 27.8 million vehicles last year, down by 4.2% from 2017, the South China Morning Post reports.
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