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Under the wave of global car companies generally lacking cores, the shortage of new cars provides special development opportunities for the second-hand car market. However, according to industry reactions, in the traditional peak season at the end of this year, second-hand car transactions have encountered a situation of "peak season is not booming".
Shenzhen as the national second-hand car market vane, securities times recorded a local second-hand car dealership found that the head and small and micro enterprises operating individual feedback difference, but generally agree that there was a significant correction in sales in October; on the other hand, second-hand businessmen also set their sights on the new energy vehicle market, to facilitate the second-hand car trading series of policies, financial services are also gradually introduced and improved, to help the industry standardize operations.
A variety of factors have caused the peak season to be sluggish
On a weekday afternoon, the reporter came to Luohu Sungang in Shenzhen as a car buyer, where a large number of second-hand car dealers gathered. The exhibition halls of most car dealers are full of all kinds of mid-range and high-end luxury cars, the inside of the windshield is hung with vehicle prices, driving maintenance, evaluation, etc., and the door of the store is sporadically emitted with Japanese second-hand cars with a price of no more than 100,000, but there are only a few customers who come to see the car to inquire.
"In previous years, I was too busy to answer the phone, but this year there were very few calls, which has never been the case." A second-hand car dealer told reporters that the traditional used car season is from October to the Spring Festival, but the transaction volume at the end of this year is only 20% of the same period in 2019, and it is only half of the same period in 2020, and the annual transaction volume is also very small.
The second-hand car dealer pointed out that a head used to collect dozens of cars every day, but recently there was a period of time when the collection of cars was suspended; the transaction price of used cars was reduced by single digits, but for the second-hand car dealers with thin profits, the amplitude has been very large. There are also some second-hand car shop clerks who say that the recent transactions are relatively flat, and the price of second-hand cars has been reduced, but the amplitude is not large.
According to the latest data released by the China Automobile Dealers Association, from January to November 2021, the cumulative transaction of used cars nationwide was 15.9669 million units, an increase of 26.38% year-on-year, exceeding last year's level; in addition, the ratio of monthly transaction volume between used cars and new cars reached a maximum of 0.83 this year, a record high. Among them, the national second-hand car trading volume in November was 1.5437 million units, a month-on-month increase of 5.99%, a monthly decrease of 1.91%, and the transaction amount was 103.648 billion yuan.
As the leader of the national second-hand car dealer, the staff introduced that the company's inventory has been maintained at a stable level of about 1800 to 2500 units for a long time, and the exhibition hall exhibits all the inventory vehicles. Chen Xiangda, general manager of the company, told the Securities Times reporter that this year's second-hand car market is a situation of "peak season is not booming", especially in October, the decline in transactions is more obvious, which should be related to the macroeconomic downturn; on the other hand, second-hand cars also appear in the state of "off-season is not weak", and sales in the first half of the year are relatively stable, or better than expected.
"Overall, the overall sales of high-end used cars this year are still better than in previous years", Chen Xiangda said, the main reason is that the shortage of chips in car companies has led to a shortage of supplies, new cars are in short supply, used cars are convenient to pick up, and purchasing power spills over the second-hand car market to a certain extent; at the same time, the original owners of the sellers can also reduce some discounts and have a strong willingness to sell. According to statistics, the average monthly sales of used cars in Shenzhen are about 30,000 units, and the average monthly sales of Alconda are about 1,500 vehicles, but the sales account for nearly 1/4, and the annual growth rate is expected to be about 6%, which has slowed down compared with the previous year.
Luo Lei, deputy secretary-general of the China Automobile Dealers Association, told the Securities Times reporter that sales in October fell compared with the same period last year, "but the degree of decline is not very high, about 2%, 3%. According to reports, the main reason is related to the shortage of chips, short-term terminal retail prices rose, and the purchase price also rose, but market demand was subsequently suppressed.
For the monthly negative year-on-year growth, the association pointed out that on the one hand, because of the repeated impact of the epidemic, sporadic cases have appeared in various places since the end of October, the passenger flow of the second-hand car market and cross-regional circulation have been greatly affected, the transaction volume has shown a downward trend for three consecutive weeks, and the average daily transaction scale has returned to the off-season level. On the other hand, the base of the same period last year was higher, and the consumer demand affected by the epidemic in the first half of 2020 was more obvious in the fourth quarter. Based on the above influencing factors, the overall performance of the used car market in November this year was not strong. However, with the epidemic prevention and control entering the tail-end stage, most of the affected enterprises have basically resumed normal operations, and the market trend has gradually improved.
The new energy used car market is exploring and moving forward
This year, the domestic new energy vehicle popularization momentum is booming, but the corresponding second-hand car market is still in the early stage of development, on the one hand, the peak of new energy vehicle scrap has not yet arrived, on the other hand, the low residual value of second-hand cars has become a constraint.
Securities Times reporters visited the Shenzhen second-hand car market and found that the new energy vehicles displayed by each car dealership were fewer, and most of them were placed in non-main exhibition areas, mainly tesla, Weilai, Xiaopeng, Hongqi and other brands of high-end models.
Chen Xiangda said that at present, the proportion of new energy vehicles in the second-hand car market in the country is between 2% and 5%, and this proportion will rise rapidly with the trend of oil to electricity in the next few years, according to relevant agencies, the proportion of new energy vehicles will reach 70% by 2030.
In this process, the second-hand car transaction needs to solve the problem of the low retention rate of new energy vehicles. According to the "October 2021 China Automobile Retention Rate Research Report" released by the China Automobile Dealers Association, the 3-year retention rate of plug-and-mix models is 51.6%, the 3-year retention rate of pure electric models is only 41%, and the 3-year retention rate of different types of fuel vehicles is more than 60%.
Cui Dongshu, secretary general of the Association, said that the retention rate is low first because the life of new energy vehicles is short, traditional fuel vehicles as a mechanical product, the service life of 15 to 20 years, and new energy vehicles are a consumer electronic product, the life expectancy is often only about 10 years; in addition, new energy vehicles are still in the early stage of development, technology improvement and cost reduction are very fast.
Compared with traditional fuel vehicles, power batteries account for more than 1/3 of the cost of the vehicle, and are also the fastest developing components of technology, so the evaluation of batteries greatly affects the residual value of new energy vehicles. Chen Xiangda said that new energy vehicles need a set of pricing methods that match their characteristics, the car and the battery should be divided into two, and the battery evaluation should be combined with accurate data such as mileage, service life and driving kilometers, "We are now recruiting professionals in this area, and we are gradually accumulating data, hoping to be prepared before the new energy used car market really breaks out." ”
However, the low retention rate may only be a phased feature of the early stage of the development of new energy vehicles, and with the maturity of various technologies, the price of vehicles will gradually stabilize. "At this stage, it is difficult to require new energy vehicles to maintain a good level of retention rate compared with traditional fuel vehicles, and the significance is not particularly large." Our efforts are to continuously improve technology and reduce product prices, so as to accelerate the development of new energy vehicles, rather than paying too much attention to the retention rate. Cui Dongshu said.
It is worth mentioning that a number of new energy vehicle companies have recently been involved in the second-hand car business. Xiaopeng Automobile launched an official second-hand car platform during this year's Guangzhou Auto Show, and developed its own second-hand car evaluation system for the brand, Xiaopeng said that this initiative is to allow car sellers to sell or replace vehicles efficiently and value-preserving, so that car buyers can choose vehicles transparently and with peace of mind.
Nio also released its used car business in January this year, which also provides testing and evaluation services, and only targets its own brands, and NIO plans to invest 3 billion yuan in this business within five years. As early as 2019, WM Automobile announced that it would create second-hand car testing, e-commerce, warranty, certification and other services under the mode of "direct purchase, direct flipping, direct sales and direct leasing".
Some insiders told the Securities Times reporter that new energy car companies do second-hand car business mainly to maintain the price of second-hand cars, and then promote the sales of new cars of their own brands, the scale of the new energy used car market or rely on professional third-party construction, "the gross profit margin of new car manufacturers is about 16%, the gross profit margin of second-hand cars is only a few points, relying on efficient turnover, so new car manufacturers can not make money in the second-hand car business, nor to make money." ”
It is expected that the circulation policy will be further liberalized
In the acquisition of vehicle sources and circulation links, the relocation restriction policy still affects the second-hand car industry. Although as early as 2016, the General Office of the State Council issued the "Several Opinions on Promoting the Convenient Trading of Used Cars", proposing that no relocation restriction policy should be formulated and implemented, in line with the national emission and safety standards for motor vehicles in use, and used cars can be moved in during the validity period of environmental protection regular inspection and annual inspection. However, nine cities, including Beijing-Tianjin-Hebei, Jiangsu, Zhejiang, Shanghai, and Guangzhou-Shenzhen in the Pearl River Delta, are key areas for air pollution prevention and control and are not subject to the rule.
The restriction on the relocation of large urban agglomerations directly affects the supply of local vehicles. "In Shenzhen, the second-hand car market is dominated by high-end cars, the local car source is limited, and the cars transferred from other places need to meet the National VI standards, so the abundance of vehicle sources will be affected to a certain extent." In addition, the volume of second-hand car transactions in Hebei in recent years has been declining, because the local income level in Hebei is not too high, most of the car sources come from the Beijing-Tianjin region, and after the relocation, it can only rely on its own car sources, which is difficult to meet the local demand. Luo Lei told reporters.
"Restricting the circulation of transactions does not restrict the flow of vehicles, and restricting the relocation of used cars is of little significance to environmental protection, and it will also slow down the sales of new cars." Chen Xiangda told reporters that today's car replacement is the main growth driver, if the old car is difficult to circulate, it will naturally weaken the consumption of new cars; old vehicles in large cities such as Beijing, Shanghai, Guangzhou and other large cities can not flow into small and medium-sized cities, they can only be precipitated locally, and can not achieve a large-scale vehicle metabolism nationwide.
In addition to the relocation restriction system, the procedures for second-hand car transactions are also being further improved, including the simplification of the "transfer" procedures for second-hand cars traded in different places. In September this year, the Ministry of Public Security, together with the Ministry of Commerce and the State Administration of Taxation, implemented the "inter-provincial general office" for the registration of second-hand car transactions, which will change from "two places running" to "one place to do" to "one place" to "one place" to "two places to transfer back and forth". At present, the simplification plan has been implemented in 218 cities such as Beijing, Shijiazhuang and Jinan, and will be implemented nationwide by the end of this year.
Chen Xiangda said that after the simplification of the procedures, the transfer cost of 1500 yuan per car will be reduced for second-hand car dealers, and the traffic police department will also save 2000 yuan of administrative expenses per car, and the whole process will be more time-saving and efficient.
At present, in addition to Tianjin, Hangzhou and Guangzhou and other cities with limited purchases and license plates, Shenzhen also issued the "Interim Measures for the Management of Turnover Indicators for Second-hand Car Transactions (Draft for Comment)" in July, which intends to allocate turnover quotas to second-hand car dealers who meet certain conditions to promote the healthy and orderly development of second-hand car transactions and improve the circulation efficiency of the second-hand car market.
According to second-hand car practitioners, the previous second-hand car market was dominated by brokerage mode, and second-hand car brokerage companies could only transfer cars to individual names first because there was no car indicator, and this repeated transfer would increase transaction costs and time costs, and also increase the risk of car dealers. In addition, in actual operation, because cars traded in the name of individuals can be exempted from VAT, many second-hand car brokerage agencies and individual traders borrow personal indicators to "exploit loopholes" and only pay VAT on the commission part.
In April last year, the State Administration of Taxation issued the Announcement on the VAT Policy on the Distribution of Used Cars, from 1 May 2020 to 31 December 2023, taxpayers engaged in the distribution of used cars sold their acquired used cars, from the original 3% levy rate minus 2% in accordance with the simplified method, to reduce the VAT at a reduced rate of 0.5%. It is worth noting that the preferential policy is only for taxpayers of second-hand car distribution, excluding enterprises that auction, broker, and appraise second-hand car.
Chen Xiangda told reporters that Shenzhen's turnover indicator system is quite flexible, in addition to static indicators, it also includes dynamic 24 hours, which is used as a series of evaluations such as test drive, maintenance, and testing, which is very in line with the use scenarios of second-hand car manufacturers. It is predicted that this move is expected to promote the development of the second-hand car market in the direction of health and compliance, and it is expected that the annual sales of the second-hand car industry of 40 billion yuan will be officially included in the scope of Shenzhen's GDP assessment.
Financial empowerment of used cars to standardize and operate on a large scale
There are still irregularities in the tax payment process of domestic second-hand car transactions, which directly affect the large-scale development. Luo Lei introduced to reporters that from the actual implementation of the situation, some forward-looking car dealers began to use the new second-hand car value-added tax policy, according to 0.5% to the state tax. In this way, after the acquisition of the vehicle, the ownership is transferred to the company's name and then sold. However, most car dealers still transfer vehicles to individual names, and after sales, they issue transaction invoices in accordance with individual transactions in the second-hand car trading market, and transfer ownership from individual names to buyers without paying VAT.
"This practice is superficially tax avoidance, but because property rights have no relationship with the company, the flow of funds does not match the flow of goods, there is a certain degree of management difficulty, which is not conducive to corporate management and large-scale transactions." Luo Lei said.
In addition, the problem of commodity attributes of used cars still needs to be solved urgently. "Because the vehicles purchased by second-hand car dealers are not for their own use, but for sales, there is no need to go through the vehicle driving procedures, which requires a middle ground, that is, commodity attributes." Solve the commodity attributes, the acquired second-hand cars according to the general commodity management, can greatly reduce the difficulty of operation and management, easy to enterprise management. At the same time, due to the clear ownership, it can also obtain the support of financial institutions. Luo Lei said.
This statement has also been recognized by the second-hand car financing guarantee agency. Yang Yun, general manager of Shenzhen Qianxin Automobile Service Co., Ltd., told reporters that at present, second-hand car dealers generally cannot apply for bank inventory financing. In essence, because Shenzhen is a limited license city, the transfer of vehicle property rights acquired by car dealers can usually only borrow other people's car indicators, rather than under the car dealer's own name, which leads to inventory financing lenders, unable to complete normal property rights mortgage procedures, and the loan risk is close to "empty", and the risk is too large.
At the same time, from the perspective of second-hand car dealers, even if the property rights mortgage time of normal vehicles usually takes half a month, and such a long time the car may be sold, and the cost of mortgage fees will be generated; in addition, the qualifications of second-hand car dealers are uneven, many of them belong to the nature of self-employed individuals, and even have no public account, which does not meet the conditions of bank loans, and the financing costs that second-hand cars can generally bear are limited, and the estimated annualized interest rate is about 12%.
"If the bank itself does it, the amount of business is too scattered to cover; if the financial institution comes from the inventory financing of the car dealer alone, the financing cost is often higher than the second-hand car dealer's affordability." Yang Yun pointed out that the second-hand car industry needs professional institutions to obtain a certain amount of credit from banks, guarantee compliance small and medium-sized second-hand car dealers, help them accept the bank's risk control audit, obtain lower-cost credit, and expand the scale of operation; at the same time, by doing consumer-side car loan business, further ensure their own profits.
From the trend point of view, the transaction growth rate of the second-hand car market has surpassed the new car market. According to the association's forecast, in 2023, domestic second-hand car sales will strive to exceed 30 million; in 2025, the second-hand car trading volume will be basically the same as new car sales; on the other hand, the current China's second-hand car trading volume is only about 1/3 of the United States, there is still huge space, and further financial innovation is needed in domestic automobile sales, especially in financial leasing.
Regarding why the proportion of domestic second-hand cars and new cars is larger, Luo Lei told reporters that domestic purchase of cars is usually accustomed to obtaining the property rights of vehicles, and only when they are idle or need to be updated are traded in the market; while 20-30% of new car sales in mature markets such as the United States are realized through financial leasing, that is, consumers only buy the right to use the vehicle for a certain period of time, generally ranging from 1-3 years, and the property rights and use rights are separated. This part of the car source is relatively concentrated, but also relatively high-quality, can be locked in advance. There is also a part of the centralized supply from leasing agencies, which are generally used cars with relatively new age. Therefore, in mature markets, the circulation speed of used cars is much higher than that in China. In addition, from the perspective of China's national conditions, most of the current ownership is new cars, and more than half of the cars are within three years of age, which also determines the low frequency of exchange.
"The construction of used car information also needs to be improved." Luo Lei said that after all, most of the market participants are still in a small and weak state, with annual sales of 100 cars, and the entire industry's industry also needs a cycle of growth.
Chen Xiangda expects that the gross profit margin of used cars in China is lower than that in the United States, but the number of cars in the world is the first, the business model is concentrated in large cities, and the level of related assessment and maintenance services is also constantly improving. "China's used car turnover rate will certainly be more advantageous than that of the United States in the future, and the quality will be higher."
Editor-in-charge: Chen Shuyu
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