AutoBeta(AutoBeta.net)08/21 Report--

China's car sales continue to decline, affected by the market environment, joint venture brands and independent brands are also under great pressure. China's new car sales were dismal in the first half of the year, down 12.4% from the same period last year, and passenger car sales fell 14% from the same period last year. However, according to the China Automobile Circulation Association, the used car market is still growing, although the growth rate has slowed due to the influence of the new car market.

In June 2019, a total of 1.2444 million second-hand cars were traded in 1068 second-hand car markets in 31 provinces across the country, an increase of 7.18 percent from the previous month and 17.76 percent from the same period last year, with a transaction value of 78.307 billion yuan. A total of 6.862 million second-hand cars were traded nationwide from January to June 2019, an increase of 3.93 percent over the same period last year, with a transaction value of 433.609 billion yuan. According to the data, in 2019, the new car market showed a negative growth trend compared with the same period last year, while the growth rate of the used car market slowed down.

The sudden outbreak of used cars in June was mainly due to the preparations made by dealers in advance for the switching between the fifth and sixth countries, especially the implementation of a large number of used car dealers in the sixth region in advance to avoid the situation that there were no cars to sell. After more than two months, the new national five inventory cars have been basically digested, and the terminal price has also been recovered and adjusted to a certain extent.

In the first half of 2019, a total of 3.9887 million basic passenger vehicles were traded, an increase of 2.4 percent over the same period last year, accounting for 58.13 percent of the total trading volume of second-hand cars. The trading volume of SUV was 580300, an increase of 5 percent over the same period last year, accounting for 8.46 percent of the total trading volume. 434300 vehicles were traded, an increase of 12.39 percent over the same period last year and 6.33 percent of the total trading volume.

There were 164900 cross-type passenger cars, an increase of 4.44% over the same period last year, accounting for 2.40% of the total trading volume. In terms of commercial vehicles, the trading volume of buses was 702100, up 0.15 per cent from the same period last year, accounting for 10.08 per cent of the total trading volume; 691600 trucks, up 17.09 per cent from the same period last year, accounting for 10.23 per cent of the total trading volume; and other models accounted for less than 2 per cent of the total trading volume. From the perspective of each segment of the model, the trading volume has increased, with trucks and MPV models growing faster, both growing by more than 10 per cent year-on-year.

It is worth mentioning that with the gradual elimination of barriers to the circulation of second-hand cars in various regions of the country, the national liquidity of second-hand cars has increased, and the further opening up of the policy of restrictions on relocation in many areas has also invigorated the overall assets of the automobile consumer market. The growth of the transfer ratio has also strengthened the driving force of the second-hand market.

In addition, on April 29 this year, the Ministry of Commerce, the Ministry of Public Security and the General Administration of Customs jointly issued a circular to carry out the export of used cars on a pilot basis in many places. The Ministry of Commerce has said publicly that if the trading volume of second-hand cars in developed countries is twice as much as that of new cars, and the trading volume of second-hand cars is more than 10% of the transaction volume, there is great potential for the development of China's used-car market and used-car exports.

Industry insiders believe that although second-hand car exports made little contribution to the export volume in the first seven months of this year, with 10 pilot cities realizing exports one after another, it is expected that the scale of second-hand car exports will expand rapidly in the second half of the year, which will provide new increments for stable foreign trade.

However, it should be noted that in July this year, the inventory early warning index of car dealers reached 62.2%, up 11.8% from the previous month and 8.3% from the same period last year. The inventory early warning index was above the warning line, reaching the second peak of the year.

The China Automobile Circulation Association also said in this regard that from the analysis of the data collected so far, market sales will show a year-on-year decline of more than 15% in July.

For the development trend of used cars, the switch between the fifth and sixth grade of the country, the growth of data for the used car market in the short term, but the underlying reasons are quite complex, which may also overdraw the sales of used cars in July.

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