China is the largest auto market in the world, but surprisingly, there are fewer second-hand car sales than new ones. Now it looks like this may be about to change.
This is a newly opened second-hand car market in Shijiazhuang City, the capital of Hebei Province in north China. Hundreds of car dealers are inside. More people are now choosing to buy a second-hand car.
"I began to drive second-hand cars six years ago, and have changed several cars," Buyer Wang Zhiqiang said.
The price is a major factor. A relatively new second-hand car is at least 15 percent cheaper than a new one. They are coming from more developed regions to less developed regions. And the frequency of people changing cars is also rising, along with more financing solutions.
"70% of sales involve loans. It is a fast developing market. It only requires having a job and steady income, and you will get a car loan in a day," Loan broker Shi Yueguang from Shijiazhuang, Hebei Province, said.
The market for second-hand cars has huge potential in China and is developing fast. However, there are still barriers that are restraining the development, and that is what policy makers are trying to change.
In March, the State Council released new guide lines to promote the second-hand car market, cancelling barriers on cross region sales. However, for many regions, trans-regional sales only apply to cars that meet the new emission standard, which basically means, cars made in 2016.
"This limits the supply. Cars between two to six years old are the most popular ones," Car dealer Zhao Zhanfeng from Shijiazhuang, Hebei Province, said.
"China's second-hand car sales will reach ten million this year. Yet it is still less than new car sales. In developed countries, second-hand car sale could be four to six times more than new car sales," Chairman of Hebei Second-hand Car Association Bi Shengkui said.
Many regions fear allowing second-hand cars to flow in could bring more pollution. As China is planning to fully implement new emission standards in 2017, it could be the key to unlocking the market.
