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CUCA 2017: China’s used vehicle market undergoing major transformation

WUHAN, Hubei – China’s used vehicle market is undergoing major transformation and industry stakeholders better recognize this and grasp new development opportunities.

That was the consensus among participants at the 2017 China Used Car Assembly organized by China Automobile Dealers Association (CADA) here on July 5-7.

Shen Jinjun, president of CADA, said in his opening keynote that the used vehicle market is ready to take off because the country now has a high automobile parc, a much-improved policy environment and the right market conditions.

Luo Lei, deputy secretary general of CADA, predicted that China’s used vehicle transaction volume in 2017 will grow about 20 percent on last year’s level of 10 million units. The market grew 21 percent to 4.8 million units in the first five months of 2017.

Zhang Xu’an, founder and CEO of Yixin Group, an online platform under vertical portal Bitauto providing auto financing services, pointed out that the new and used vehicle markets are being integrated in terms of user base, vehicle sources and channel, and his company plans to utilize online and offline resources and invest about $1 billion over the next five years to build an integrated platform including used vehicles, new vehicles, aftersales service and insurance to provide a new, more efficient retail sales business model.

Tian Dong, general manager in charge of used vehicles at China Grand Auto, the country’s largest dealership group, said that based on customer flow data at its 4S stores across the country, more than one-fifth of its customers come to their 4S dealerships to purchase a vehicle. That reflects customers are increasingly buying their second or third vehicles and trading in their old vehicles for new ones.

Chris Dai, chairman and CEO of Uxin Group, said that 61 percent of consumers like to purchase a vehicle in a location different from where they live and consumers who purchase used vehicles in third-tier cities often pay 20-25 percent more than those in first or second-tier cities. Therefore, Uxin Group has pushed out cross-region vehicle purchase services utilizing national e-commerce networks and effective logistics systems to help dealers sell vehicles to non-local residents effectively and conveniently.

Cai Zhongmin, general manager of Shanghai Used Vehicle Trading Center, thought it was the responsibility of used vehicle trade centers to build the integrity system from the two aspects of vehicle certification and aftersales warranty for dealers.

Shao Baochang, a renowned lawyer and member of CADA’s Experts Committee, introduced the handling method of vehicle consumption dispute and suggested that the vehicle circulation industry establish a cross-regional network mechanism resolving automobile disputes.

Dr. Mei Songlin, vice president and managing director of J.D. Power China, in comparing used vehicle development in the U.S. and China, said that used vehicle market development must bring external forces to promote internal revolution.

Yang Xuejian, CEO of cheyipai.com, an online used vehicle trading platform, considered that the big data of vehicle is the real core behind the high quality and efficient operation of online used vehicle transactions. The company earlier this year opened its own online program to the industry hoping to provide a bigger open platform.

Yao Junhong, founder and CEO of dasouche.com, another online used vehicle trading platform, believes that his idea of a “New Retail” means that the biggest opportunity is for used vehicle dealers to become traders and service providers.

Li Haiyan, founder and chairman of chedai.com, warned the industry about financial risks and called on companies in the used vehicle industry to follow financial growth curve and maintain a reasonable growth level.

Liu Peng, a manager with FAW-Volkswagen Audi Sales Division’s used vehicle department, said that Audi’s certified used vehicle program has operated in China for 13 years and more than 100,000 units have been certified. Trade-in sales, according to Liu, now account for about a fifth of Audi’s new vehicle sales.

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