Exports of used cars rise on policy steps

Sales of both pre-owned gas-powered autos, NEVs up on higher-quality units

Speaking fluent English into a smartphone camera and weaving his way through various used cars placed in a well-decorated exhibition hall, Zhang Qifeng, a livestreamer at automobile dealer China-Europe Auto City, was recently showcasing the features and functions of the automobiles to an overseas audience.

"I now present you the Range Rover Evoque, a subcompact luxury crossover sport utility vehicle. It's a three-year-old car with some 6,300 miles on the odometer, and the final offer is $45,000," Zhang explained to the audience in English.

This is a new-format marketing strategy to capture the minds and wallets of potential used-car buyers as demand spurts for such vehicles from overseas markets, said Chen Youfu, general manager of the automobile dealer based in Chengdu in Southwest China's Sichuan province.

Over 700 used cars have been exported to the Middle East and Central Asia as well as Russia in the first five months of this year, a 60-percent increase year-on-year, Chen said.

Leveraging livestreaming platforms offers a greater opportunity to gain more visibility, keep in touch with overseas customers, increase followers and, thereby, increase sales, he said.

Chengdu, along with Beijing, Shanghai, Tianjin and Guangdong, were among the first batch of 10 regions that were permitted to kick off the export of second-hand cars in May 2019.

With the list extended to 44 regions, more companies operating such businesses have witnessed fast-growing orders for used cars from global buyers.

China exported about 40,000 units of used cars last year, according to an estimate by the China Automobile Dealers Association. The number was only 3,036 units in 2019.

In the first five months of this year, various regions have maintained robust sales of used cars to overseas markets.

Chengdu and Tianjin, for instance, exported 4,380 and 5,200 second-hand vehicles, respectively, according to data released by the local Customs administration.

Despite being weighed down by the effects of the COVID-19 pandemic, transport and logistics disruptions as well as dampened global demand, the rapid growth in used car exports has been no easy feat, said Wang Haiyang, a researcher with the China Automotive Technology and Research Center.

Intensified efforts to optimize vehicle transaction registrations, ease license applications for relevant companies and simplify Customs clearance procedures have created an enabling environment to bolster the export of second-hand cars, Zhang said.

On top of policy incentives, the country's booming new energy vehicle sector, highlighted by its wide variety, cost-effectiveness and intelligent vehicle operating systems, has contributed significantly to used car exports.

Tianjin Cinko Vehicle Logistics Co Ltd has been exporting used cars since September 2020, and has rapidly expanded business with second-hand NEV exports as its mainstay after China's NEV industry developed quickly.

Shi Yunsheng, the company's general manager, said NEVs purchased by domestic consumers are among the most advanced, featuring higher driving ranges, ultrafast charging and smart operating systems. Even when these cars are resold, they sell like hotcakes, Shi said.

The company landed its first order at the end of 2020 with an Eastern European buyer who originally intended to procure automotive batteries, Shi said. The client, however, ended up buying six used NEVs produced by China's leading EV maker BYD after learning that the price of the two items was about the same.

Shi also took the initiative to reach out to others to secure more orders.

In September 2021, the Tianjin municipal government launched an overseas exhibition for used cars of Chinese brands in Dubai, in which the company, together with eight peers, signed up to showcase 27 vehicles.

The exhibition was intended to last three months, but all the cars on display were sold in less than a month.

This was much better than expected as their foreign counterparts were mostly selling luxury brands from Europe and Japan like BMW, Mercedes-Benz and Lexus, Shi said.

The company sold more than 200 used cars in 2021, while the number surged tenfold to over 2,000 in 2022.

As its footprint expanded in Dubai, Ukraine, Kazakhstan, Uzbekistan, Poland, Bulgaria, Georgia and other countries, a 500 percent year-on-year increase in the sales of used cars was registered in the first four months, according to Shi.

Luo Lei, deputy secretary-general of the China Automobile Dealers Association, said that exports of used cars from China, especially gasoline cars, did not have much of a price advantage in the international market.

In recent years, however, many countries have set higher tariffs on petrol- or diesel-used vehicles while placing almost no tariff on second-hand NEVs, Luo said.

China, as the world's largest producer of electric vehicles, has ample quality supply in the pipeline, which strongly boosts exports of used NEVs, Luo added.

Further, the average price of used cars has increased significantly over the years, from less than $5,000 per unit in 2019 to nearly $15,000 in 2021, largely due to the better quality of homegrown brands, Luo said.

Used car exports in developed countries occupy a 10 percent share of its total used car transactions. China's used car exports are expected to surge to millions of units per year in the future, considering the fact that annual sales of second-hand vehicles in China stand at 17 million on average currently, Luo said.

However, the country's used car export business remains in the early stages of development. Greater government support should be channeled to the sector to help more companies survive and thrive, company executives said.

Shi of Tianjin Cinko Vehicle Logistics said a robust capital chain is a matter of life and death for enterprises involved in this capital-intensive industry.

All departments concerned should roll out more preferential policies to allow financial institutions to strengthen support for companies in the sector at a lower cost.

In addition, used car exports are at the downstream end of the auto industry chain.

The government should establish more platforms to help match demand for acquiring used cars with upstream companies such as large-scale State-owned leasing companies and ride-hailing firms more efficiently, Shi added.

Although the scale of exports of used cars in China still remains modest compared to countries like the United States and Japan, the country, as the world's largest producer and consumer of automobiles, is well positioned to tap into the potential with ample supply of used cars, said Xu Hongcai, deputy director of the economic policy committee at the China Association of Policy Science.

China had more than 412 million registered vehicles by the end of last year, the largest fleet in the world.

The number of registered new energy vehicles, in particular, hit 13.1 million, according to the data from the Ministry of Public Security.

"It's just a matter of time before more of them are resold. The quality of Chinese cars has also improved to the point where many developing-world consumers may well choose them as a cheaper alternative to used Toyotas or Fords," Xu said.