China's used car market growth challenges new vehicle sales.
A second hand car market Image: Hubei |
Despite new cars outselling used vehicles by more than 3 to 1 last year with new output booming, tougher licensing laws and rising costs are compelling more and more buyers to purchase 'pre-loved' cars.
According to a survey conducted by analysts Nielsen and the China Association of Automobile Manufacturers, almost a third of those planning to buy a car said they intended to buy a used vehicle.
Nonetheless, the used car market is still underdeveloped. Many used cars are often bought at auto fairs in stadium-sized halls or unregulated open-air markets. Until now, foreign carmakers paid little attention to the budding market as there there were very few in existence.
According to data from the China Automobile Dealers Association, only 4.8 million used cars were sold last year, compared to 15.5 million new. However, the CADA expect this to change. Used car sales increased by 15% year-on-year in 2012 and Deputy Secretary General, Shen Rong, predicts used car sales will double by 2016 to 10 million, catching up with new car sales at around 35 million by 2020.
In the US, the used car market is around four times that of the new car market by sales volume.