Second hand car sales going up and up in China

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We at China Car Times hopes that the price of second hand cars drops in the next few years – currently new cars are only depreciating by around 10,000rmb per year ($1300USD, or there abouts). The car market is very very new in China, I believe in the next five years most of the new drivers are going to want to trade their cars in and prices will DROP like lead panties, and this we cant wait for (actually, we dont want it to happen)

AFTER many years of boosting new-car sales figures, China’s motorists are increasingly wanting to upgrade, bolstering its fledgling used-car sector.

Second-hand car sales totalled 2.7 million in 2006, according to the Ministry of Commerce, less than half that of new-car sales.

Compared with developed countries, where used-car sales are double or triple new-car sales, China’s used-car market has a huge potential.

A survey by Sinotrust, a leading consulting company, shows China’s new-car owners keep their vehicles an average of 6.5 years, while 71.2 percent choose to purchase a new car after three to five years.

In Beijing, 170,000 used cars were sold in the first half and the ratio of used- to new-car sales reached 0.85:1, while two years ago, it was only 0.54:1, a CADA official said.

Xu Dong, deputy general manager of a Guangdong-based dealer, said used-car sales will accelerate as 4S (franchise dealers in “sales, spare parts, service and surveys”) and overseas used car dealers enter the market.

Li Xiaokuan, the deputy director of market administration of the State Administration for Industry and Commerce, suggested that manufacturers should pay more attention to used-cars sales.

“Trade-ins could not only open up a new profit area, but also enhance their new-car sales,” he said.

Li said China’s used-car sales rules had no restrictions on 4S dealers selling second-hand cars, and they should include trade-ins as part of their main business scope.

However the sector still faces problems, including dealer reliability, asymmetric information, lack of industrial standards, and contract difficulties.