Shortly after the release of "Opinions of the Central Committee of the Communist Party of China and the State Council on Accelerating the Construction of a Unified National Market", the State Council issued a package of policies and measures to stabilize the economy (hereinafter referred to as "measures"), and once again proposed to completely cancel the restrictions on the movement of used cars and improve the management regulations on the registration, filing and vehicle transaction registration of used car market entities.
This has injected a warm current into the depressed used car market. China automobile dealers association said that with the implementation of relevant favorable policies, it is expected that the replacement volume will increase significantly in June. At the same time, the source, circulation cost and circulation efficiency of used cars will be improved, the price of used cars will be more close to the people, which will stimulate the growth of market demand and help the inventory of used car dealers to be digested as soon as possible.
The market is in a recession zone.
In April, the second-hand car market experienced a rare year-on-year double decline in transaction volume and transaction price. The transaction volume of the second-hand car market nationwide was 1,100,600 vehicles, down 16.51% from the previous month and 26.10% from the previous month. At the same time, the average transaction price of used cars continued to fall. Since the average price of used cars reached a peak of 71,800 yuan in December last year, it fell to 68,300 yuan in April this year.
Luo Lei, Deputy Secretary-General of china automobile dealers association, believes that the epidemic situation, shrinking market demand, weakening expectations and the decline in purchasing power caused by rising oil prices are all the reasons for the depression of the used car market.
In May, the average daily transaction scale was slightly better than that in April, but there was still a gap compared with the same period last year. According to the second-hand car Zhou Du Express published by the Information Department of the Circulation Association, the average transaction volume in the fourth week of May was 53,900, up 5.48% from last week and down 10.75% year-on-year. It is estimated that the overall transaction scale of the used car market in May will be 1.13 million to 1.15 million, an increase of 3% from the previous month and a decrease of 21% from the same period last year.
The latest issue released by the Circulation Association also shows that the "China Second-hand Car Managers Index" (UCMI) was 37.7% in May, which is below threshold, and the second-hand car market is still in a recession.
According to Lang Xuehong, Deputy Secretary-General of china automobile dealers association, half of used car managers reported that the market demand decreased in May. There is no obvious change in the number of passengers on the used car line, but the number of passengers off the line has decreased to some extent. The reasons for this situation are, on the one hand, that the epidemic prevention and control requires to reduce going out, on the other hand, the used cars traded in the market are still mainly fuel vehicles, and the continuous rise in oil prices has discouraged some consumers.
On the whole, the second-hand car market did not perform well in May, and the decrease in the rate of consumers entering the store was still the main reason that affected the sales of second-hand cars. At the same time, with the support of the "May 1" new car price concessions and local government car subsidies, consumers who originally wanted to buy second-hand cars switched to new cars, and the inventory in the saturated state was not released, which led to the extension of inventory turnover time, and it was difficult for car dealers to collect the occupied funds, which increased operational risks.
The second-hand car industry as a whole is depressed, and at the level of car dealers, it is difficult to survive. A number of car dealers told reporters that the second-hand car business is now under great pressure, and some cars are afraid to accept and the inventory is not easy to sell.
Open up blocking points to promote circulation
Although in the past two months, the used car industry has been in trouble. However, in the past decade, except for a slight decline in 2020 due to the epidemic, the transaction volume of used cars has shown positive growth for many years, and the growth rate is much higher than that of new cars. In 2021, the transaction volume of used cars was 17,585,100, with a year-on-year growth rate of 22.7%, the highest in the past decade. The sales ratio of new and used cars in China has reached 1.49∶1, which is rapidly catching up with the sales ratio of new and used cars in mature countries.
However, behind the sustained high growth, the blocking point formed by the used car industry over the years still exists. For example, a large number of used cars will be exported from first-tier cities to second-tier to sixth-tier cities and even county areas, but the relocation restriction policy has hindered the circulation of used cars in different places, and various places have imposed emission standards and age restrictions on used cars, resulting in foreign consumers wanting to buy cars but local car owners wanting to sell cars can’t sell them at a good price.
The second-hand car industry also faces some problems, such as the failure to establish commodity attributes, restrictions on the business premises of second-hand car enterprises in some areas, and cumbersome approval procedures for adding second-hand car business to automobile distribution enterprises.
Many blocking points in the field of used car circulation have become the pain points that hinder the full release of automobile consumption potential. It is precisely because of this that after the release of the Measures, Wang Du, deputy secretary-general of china automobile dealers association, said excitedly: "The Association has worked hard to break the restrictions for more than 10 years. The overall driving effect of lifting the restrictions on the second-hand car market is immeasurable, which is a major benefit for the industry to regain confidence." He believes that the policy emphasizes promoting the commercialization and large-scale circulation of used cars, which will greatly simplify the registration procedures of used cars and completely open up the circulation of used cars.
According to the statistics of the Circulation Association, there are more than 60 million vehicles with national five emission standards, accounting for more than 20% of the existing vehicles. The obstacles to the circulation of used cars have broken the ice one after another, greatly enhancing the expectations and confidence of enterprises in the industry.
"The second-hand car industry has a strong source of vehicles. First-and second-tier cities are gathering places for high-quality vehicles. Previously, due to the relocation restriction policy, the circulation of high-quality vehicles to the low line was blocked, which inhibited the release of demand for car purchases." Wang Xiaoyu, co-founder and senior vice president of melon seeds used cars, told reporters that the breaking of the restrictions on the circulation area of used cars will enable consumers in low-tier cities to buy high-quality vehicles in high-tier cities, fully releasing the potential of automobile consumption and promoting the upgrading of automobile consumption. At the same time, the smooth sale of second-hand cars in first-and second-tier cities has released the consumer demand for buying new cars and second-hand cars, driven the steady growth of demand for automobile consumption services such as automobile manufacturing and new car sales, and revitalized the entire domestic automobile consumption market.
Measures to help warm up
After a package of measures and supporting policies to stabilize economic operation were released one after another, all localities took active actions. At the beginning of June, Hebei Province issued a notice, proposing to "completely cancel the restrictions on the movement of small non-operating used cars that meet the national five emission standards, and improve the regulations on the registration, filing and vehicle transaction registration of used car market entities". Sichuan Province also issued a notice, proposing to "lift the restrictions on the movement of small non-operating used cars that meet the national five emission standards throughout the province".
According to the investigation of the circulation association, the Yangtze River Delta and the Pearl River Delta are about to release the national five-year restriction, and Tianjin and Hebei Province have already implemented it.
"The second half of this year will be the best time to break the restrictions on relocation nationwide. If the second-hand car of Guowu is circulated nationwide, the value-added rate of Guowu will be expected to increase by 5%. " Pan Guoguang, chairman of Guangdong Junweilong Automobile Trading Co., Ltd. said.
The clarity of the "Measures" on the commodity attributes of used cars has also greatly simplified the process of operating and trading used cars. Taking the used car of melon seeds as an example, with the cancellation of the relocation restriction policy, the average delivery time of the platform in different places has been shortened by 8 days, and the delivery in different places can be completed within 24 hours at the earliest.
Wang Xiaoyu believes that the second-hand car industry is expected to accelerate its recovery in the second half of the year, and the consumer demand will be released in the traditional sales season from September to December.
"It is estimated that the transaction volume of used cars is expected to jump to 20 million in 2022. By 2025, the proportion of new and old cars will reach 1: 1. " Lang Xuehong was previously in 2021— At the press conference of 2022 Blue Book of China Automobile Circulation Industry, the industry forecast was released on behalf of the Association.
Although the future can be expected under the policy stimulus, the inventory pressure of used car dealers is still relatively high, and the speed of capital withdrawal is slow. According to the survey of circulation association, the overall inventory cycle of used car dealers in May was 47 days. Insiders suggest that car dealers should still maintain a cautious business strategy. In June, some of the delayed consumer demand will be transformed, and the national epidemic prevention situation will continue to improve. It is expected that there will be a wave of rebound in many places, but it is still recommended that used car dealers reasonably control the inventory level and inventory cycle and withdraw funds as soon as possible.