How does the export of used cars become a new highlight in foreign trade?

With the establishment of "one-stop" service centers in various parts of the country, the export of used cars has accelerated, becoming a new highlight in the growth of China's foreign trade this year. In February of this year, the Ministry of Commerce and four other departments decided to carry out the export business of used cars nationwide and issued the 2024 No. 6 announcement, which fully transitioned the export of used cars from a pilot system to an application system. Since then, local commerce departments have strongly supported capable and willing enterprises to apply for used car export qualifications and conduct used car export business. Since the application began, about 2,800 enterprises nationwide have been registered with used car export qualifications, and the annual export volume of used cars is expected to reach a new level of 400,000 units.

 

According to data from the Ministry of Commerce, between 2019 and 2023, China exported a cumulative total of 367,000 used cars, amounting to $8.74 billion, reaching over 160 countries and regions. In 2023 alone, China exported 275,000 used cars. Data from the China Automobile Circulation Association shows that from January to July of this year, China exported 203,000 used cars, with an expected annual scale of 400,000 units, representing an approximate year-on-year increase of about 30%.

Currently, China's target markets for used car exports are primarily Central Asia, Eastern Europe, and the Middle East, which are part of the "Belt and Road" initiative. Kyrgyzstan, Russia, Uzbekistan, the United Arab Emirates, and Kazakhstan rank as the top 5 countries for China's used car exports. The export volume to the top 10 destinations accounts for about 90% of China's total used car exports, indicating a very high concentration. This reflects, on one hand, the focused strategy of Chinese companies in cultivating certain markets and, on the other hand, the increasingly fierce competition among export companies in these markets.

 

From January to July, China's used car exports to the United Arab Emirates ranked first, followed by Kyrgyzstan, Russia, Uzbekistan, and Kazakhstan. Some used car dealers use Central Asia as a transit point to sell to Russia indirectly. The global scale of used car exports exceeds 5 million units, with significant overall export potential. Currently, China's used car export volume is only 3% of its new car exports, leaving considerable room for growth compared to Japan, the United States, and South Korea. Liao Zhiyong, the assistant to the chairman of Guangdong Haoche Holding Co., Ltd., stated that China's used car exports face many favorable conditions, such as strong national policy support, the continuous advancement of the "Belt and Road" initiative, the vast demand in international markets, and the continuous improvement of China's automotive industry competitiveness. As China's new car export pace accelerates and the brand recognition of Chinese cars continues to rise, the technology, products, and after-sales service in the industry chain are being continuously improved. Many countries have introduced preferential policies related to the import of new energy vehicles, including tax reductions and relaxed import conditions. This year, the business opportunity for exporting used cars with high mileage has begun to gradually emerge. According to Liao Zhiyong's analysis, the reasons include: first, the price war of new cars leading to a decrease in the price of used cars in China; second, the national and local governments have introduced differentiated support policies for used car exports; and third, the supporting supply chain services are gradually improving, with significant potential in after-sales and spare parts exports. It is evident that used cars with high mileage will be a business area that used car export companies should focus on expanding and will enter a period of rapid development.

 

（Reprinted from China Automobile News Network）