After three consecutive years of decline, China’s auto market has ushered in positive growth under the severe situation of repeated epidemic in 2021, extreme weather, reduced consumption expectations, surge in global supply chain risks and so on.
In 2021, China’s automobile production and sales reached 26.082 million and 26.275 million respectively, with a year-on-year increase of 3.4% and 3.8% respectively. At the same time, the rapid recovery of new car consumption market has also driven the rapid growth of China’s second-hand car market, which has become a bright spot of China’s auto market in 2021.
On January 12, the data released by China Automobile Circulation Association showed that in 2021, the total volume of second-hand car transactions in China reached 17.5851 million, a year-on-year increase of 22.62%, and the transaction amount was 113.692 billion yuan, a year-on-year increase of 27.32%.
From the perspective of vehicle age structure, affected by the insufficient supply of the new car market in 2021, many consumers set their eyes on the quasi new car market with short vehicle age. Therefore, a total of 4.148 million vehicles with vehicle age within 3 years were traded, with the trading volume increasing by 17.3% compared with the same period, accounting for 23.59% of the total trading volume; A total of 6.3559 million models aged 3-6 years were traded, accounting for 36.14% of the total trading volume, a decrease of 1.62 percentage points compared with the same period in 2020; The proportion of models aged 7-10 years decreased by 0.16 percentage points compared with 2020, accounting for 24.06% of the total trading volume, with a total of 4.2308 million vehicles traded.
With the growth of China’s car ownership, the source of used cars with long car age has also increased year by year. In 2021, the proportion of models with car age of more than 10 years increased by 2.11 percentage points compared with the same period in 2020, and a total of 2.8505 million vehicles were traded, with a year-on-year increase of 29.1%.
On a quarterly basis, the first quarter of 2021 was affected by the Spring Festival holiday and other factors, accounting for the smallest proportion of transaction volume; Second hand transactions were relatively stable in the second and third quarters; In the fourth quarter, affected by the spread of the epidemic and other adverse factors, the proportion of second-hand car trading volume decreased significantly compared with the previous two years, but it was still the high point of the whole year, especially in December.
According to the analysis of China Automobile Circulation Association, the automobile market will enter the peak of increase and replacement in 2022, and revitalizing the stock of second-hand cars is the key to activating the whole automobile market.
On the one hand, the replacement of used cars promotes the upgrading of automobile consumption, especially luxury cars and new energy vehicles, which are the main driving force for the growth of automobile market in 2021; On the other hand, the replacement and circulation of second-hand cars can promote the transformation of vehicles from the first and second tier cities to the third, fourth and fifth tier cities in economically underdeveloped areas, which can not only promote the deepening of automobile consumption to the rural market, but also enhance the overall vitality of the local economy.
used car becomes dealer profit new engine
According to the data of the Ministry of Commerce, in the mature automobile market, the proportion of used car trading volume to new car sales is generally more than 1.5:1. Although this proportion in China has increased from 0.55:1 in the first may of 2019 to 0.64:1 in the same period of 2020, compared with the mature automobile market, China’s second-hand car market is still in the early stage of development, The outstanding problems inherent in the industry have not been completely solved.
“The first is the problem of opaque information; the second is the problem of small, scattered and chaotic business entities; the third is the obvious fragmentation of vehicle sources. Due to asymmetric information and incomplete matching of resources, dealers have high vehicle collection costs and can not form a stable vehicle source channel, affecting the standardized operation of enterprises.” Xiao zhengsan, Secretary General of China Automobile Circulation Association, said.
Therefore, how to get through a series of “pain points, difficulties and blocking points” of second-hand car trading, revitalize the stock, stimulate the increment, and strengthen the linkage and stickiness of new cars and second-hand cars is very important for the sustainable development of the whole automobile market.
However, with a series of benefits such as the reduction of used car tax and the lifting of the “relocation restriction” policy in the past two years, the used car business has also become a new blue ocean for China’s automobile circulation industry.
According to the data, since the announcement on clarifying several VAT collection and management issues such as second-hand car distribution was issued on March 31, 2020, the relevant government departments have successively launched policies such as the guidelines for promoting automobile consumption in the business field and the notice on promoting the registration of second-hand car transactions across provinces to facilitate the off-site transaction of second-hand cars. In 2021, the full implementation of the “inter provincial office” of second-hand cars will strive to solve the problems of inconvenient second-hand car transaction and long transfer cycle from the perspective of system. The successive introduction of many policies will promote China’s second-hand car market to enter a new stage of development.
Among them, the 0.5% value-added tax on second-hand car distribution will pave the way for the expansion and strengthening of second-hand car business entities, which is not only to reduce the burden on enterprises, but also to make structural adjustment. Through the reform of tax policy, guide enterprises to change from self-employed and intermediary brokerage to second-hand car distribution, and the 4S stores of authorized dealers will widely participate in the second-hand car market, Promote the transformation of used cars to specialization, scale and standardization. At the same time, with the rapid development of automobile financial leasing and shared travel industry, the problem of vehicle source fragmentation has been gradually improved.
In order to further open up the “blocking point” in the circulation of second-hand cars and promote the development of second-hand cars, Gao Feng, a spokesman for the Ministry of Commerce, pointed out at the press conference of the Ministry of Commerce on June 24, 2021 that in the next step, the Ministry of Commerce will work with relevant departments to actively promote the transformation of automobile and other bulk consumer goods from purchase management to use management, and promote the elimination of unreasonable restrictions on second-hand car transactions, We will accelerate the implementation of cross provincial registration of second-hand car transactions, further facilitate second-hand car transactions, improve relevant policies and measures in the field of second-hand car circulation, continue to release the consumption potential of second-hand cars, promote automobile consumption in the whole chain, and accelerate the high-quality development of China’s automobile market.
“In 2021, the trading volume of second-hand cars will exceed 16 million, possibly between 16.5-17 million, with a growth rate of about 15%. The second step is to basically keep the trading volume of second-hand cars at the same level as that of new cars in 2023, and strive to exceed 30 million in 2025.” In July 2021, Luo Lei, Deputy Secretary General of China Automobile Circulation Association, predicted at the China used car conference.
Obviously, the development speed of the used car market in 2021 has exceeded expectations.
It is noteworthy that with the rapid development of the used car market, used cars have become a new engine for the growth of dealers, and chain and branding are gradually becoming the development trend of the used car industry.
“In 2020, the number of second-hand cars in China will be 281 million, and according to this development rate, it may reach 360 million by 2025. Calculated according to the current precipitation rate of 6.4%, 65% of the new sales leads are related to the possession of vehicles, and the current new car sales is a dispute among stock users. It is an inevitable trend for the marketing group to take the second-hand car business as a strategic business.” Previously, Dong Jie, deputy general manager of Yuanyuan Automobile Trading Group, said that with the decline of new car sales profits of the dealer group and the increase of after-sales market loss rate under the competition of independent service providers, the used car business should become the third “engine” of the 4S store.
“The attention of the top 100 dealer group to the used car business has entered a substantive stage.
With the increasing impact of second-hand car replacement business on new cars, the dealer group is also aware that new car sales have entered the era of replacement from the era of simple additional purchase. If second-hand cars are not done well, they can not drive new car sales. ” Recently, some people in the automobile circulation industry told the 21st Century Business Herald reporter.
new energy market
However, in sharp contrast to the explosive growth of the overall used car market and the new energy car market, the situation of new energy used cars is still “embarrassing”.
In 2021, the production and sales of new energy vehicles were 3.545 million and 3.521 million respectively, with a year-on-year increase of 1.6 times, the highest growth rate since 2016. The market share of new energy vehicles reached 13.4%, 8 percentage points higher than that of the previous year. Chen Shihua, Deputy Secretary General of China Automobile Industry Association, pointed out that the consumption rate of new energy vehicles in the private market has reached 88%, and the marketization of new energy vehicles is very high.
Cui Dongshu, Secretary General of the national passenger vehicle information joint committee, believes that the sales volume of Shanxi Guoxin Energy Corporation Limited(600617) vehicles is expected to exceed 6 million in 2022, and the penetration rate of new energy vehicles is about 22%. Among them, the sales volume of new energy passenger vehicles is more than 5.5 million, and the penetration rate is about 25%.
Although from the insurance data of new energy second-hand cars, the trading volume of new energy second-hand passenger cars and their proportion in the total sales of second-hand cars have increased year by year, in the second-hand car market, new energy second-hand cars are still in the “night before dawn”.
On the official website of Huaxiang used cars, the reporter found that at present, 8050 vehicles are on sale in the market, but there are only 43 pure electric vehicles, covering Tesla, Byd Company Limited(002594) , BAIC, JAC and other brands.
“The risk coefficient is too high!” On January 13, a second-hand car dealer said in an interview with the 21st Century Business Herald reporter, “the main reason why we don\’t like to make second-hand new energy vehicles is that the value preservation rate (second-hand new energy vehicles) is too low, the price we give is too low, the car owners are reluctant to sell, and few people come to buy cars. If we can\’t sell a new energy vehicle for a few months, we will lose money.”
According to the automobile hedging rate report jointly released by China Automobile Circulation Association and precision estimation, although the hedging rate has increased with the increase of mileage, there is still a large gap with traditional fuel vehicles. The hedging rate of three-year-old pure electric vehicles is only 42.9%.
At the same time, because the preferential policies of free installation of charging piles, battery warranty or three-year free battery replacement given by many new energy vehicle enterprises are only for the first owner, second-hand owners can not enjoy the relevant policies, which is also another important reason affecting the transaction of new energy second-hand vehicles.
In addition, the lack of residual value evaluation system and trading system is also an important factor for second-hand car dealers and consumers.
“Most second-hand car dealers in Huaxiang basically don\’t have new energy vehicles, but if a buyer is sure to, we can also find a car source.” The above used car dealers said.
In the new energy used car market, repurchase by dealers of original brands is becoming the norm of new energy used cars. According to incomplete statistics by the 21st Century Business Herald reporter, many new energy vehicle brands such as Weilai, Weima, Euler, geometry and Xiaopeng have successively launched hedging and repurchase policies.
Among them, Weilai plans to invest 3 billion yuan to establish a second-hand car trading system and launch a second-hand car business called NiO certified, which provides whole process services including vehicle detection, evaluation, acquisition and sales. Car owners can sell their cars to Weilai and consumers can buy second-hand cars from Weilai.
The logic behind the establishment of the official second-hand car platform of new energy vehicle enterprises is not only to improve the value preservation rate of brand second-hand cars, so that consumers who buy new cars have no worries, but also hope to increase user stickiness and build a circular circulation link of brand models.
However, in the face of the rapid growth of Shanxi Guoxin Energy Corporation Limited(600617) car ownership, China Automobile Circulation Association expects the new energy used car market to usher in a high growth stage.
“The return on investment of new energy second-hand cars is more than five times that of traditional second-hand cars, but why so far few people do new energy second-hand cars is because everyone doesn\’t understand.” At the China second-hand car conference in 2021, Shen Wenjun, founder of cheyide brand, once pointed out that due to the low residual value rate of new energy second-hand cars, the purchase cost of businesses will be reduced accordingly; At the same time, the dislocation of market structure caused by emerging industries enables businesses with early layout to earn higher profits.
“At present, new energy used cars are facing some development difficulties, and car dealers, operators and users also put forward some puzzles. For example, the value preservation rate of new energy used cars is generally low, and the evaluation technology of three power is still a difficult problem.” Li Xin, director of the Information Department of China Automobile Circulation Association, believes that the current renewal speed in the field of new energy vehicles is fast, so the price is relatively not particularly stable, which will bring some confusion to the operators of second-hand vehicles. However, with the rapid development of the new energy vehicle industry, including the gradual solution of problems such as business model and after-sales maintenance, New energy used cars will become the blue ocean of the used car market in the future.
