Introduction: The volume of used car transactions aged in three years has grown rapidly, and from 2022 to 2024, China's used cars may usher in an explosive period.
Judging from the past holiday practices, about a week before the Chinese New Year holiday, some residents began to return to their hometowns one after another, and some second-hand car dealers would stop selling vehicles in advance. Therefore, the demand for used car purchases in January 2022 was mainly concentrated in the first three weeks of January, while the market activity decreased significantly in the fourth week.
In this context, the overall transaction time in January 2022 was one week less than that of the same period last year, and the continuous sporadic epidemic situation caused a certain degree of adverse impact on the sales of used cars in Beijing, Tianjin, Henan and other places, but this did not affect the used car market and the desire for a "good start" in 2022.
1) "Open the door" to end three consecutive falls
According to data from the China Automobile Dealers Association, the national second-hand car trading volume in January this year was 1.4846 million units, an increase of 3.71% year-on-year, and the transaction amount was 105.281 billion yuan. However, the volume of transactions fell by 8.25% from December last year.
However, this does not prevent the used car market, which ushered in a "good start" in January 2021 and ended the year-on-year decline in used car trading volume for three consecutive months.
The data shows that from October to December 2021, the second-hand car trading volume showed continuous negative growth year-on-year, and the decline increased month by month, reaching 1.52%, 1.91% and 5.25% respectively. This data performance is surprising, but also reasonable.
As we all know, in the first half of 2020, due to the serious impact of the epidemic, the used car trading volume base is low, and in the second half of 2020, the accumulated market demand began to be released. As a traditional sales golden quarter, the demand for car purchases in the fourth quarter of 2020 was released in a concentrated manner, and the transaction volume increased by 17% compared with the third quarter, reaching the highest growth rate in the same period of the calendar year.
At the same time, the volume of used car transactions reached 1.7 million in December 2020, the highest monthly trading volume in all years.
The performance of low and high trading volume around 2020 also laid the groundwork for the large increase in the trading volume of used cars in 2021, and the growth rate in the later period showed a gradual narrowing trend, and even negative growth.
Even so, in 2021, China's used car trading volume hit a new high of 17.5851 million units, an increase of 22.62% year-on-year, and the transaction amount reached 1131.692 billion yuan, an increase of 27.32% year-on-year.
So, how does used cars perform in the market?
2) Take advantage of the strong quotient weak, SUV favored
Judging from the transactions of various subdivided models, used cars have shown the market characteristics of passenger cars that are significantly better than commercial vehicles since last year.
In terms of passenger cars, the basic passenger car trading volume last year was 10.5911 million units, an increase of 23.34% year-on-year; of which the SUV transaction volume was 1.9763 million units, an increase of 44.18% year-on-year; the MPV trading volume was 1.0086 million units, an increase of 21.24% year-on-year; and the crossover passenger car trading volume was 402,300 units, an increase of 18.59% year-on-year.
Commercial used cars, although not as high as passenger used cars, also achieved positive growth. Among them, the trading volume of passenger cars was 1.3203 million units, an increase of 7.02% year-on-year, and the trading volume of trucks was 1.4538 million units, an increase of 9.63% year-on-year.
However, in 2022, although the second-hand car market still continues the characteristics of passenger cars being better than commercial vehicles, because the overall trading day in January this year is less than the same period last year, the year-on-year growth rate of both passenger cars and commercial vehicles has declined significantly, and commercial vehicles have declined year-on-year.
Specifically, the trading volume of passenger cars fell by 11.43% year-on-year, with a total of 104,100 units traded; the trading volume of trucks fell by 6.43% year-on-year, with a total of 114,300 units traded.
Looking at passenger cars, in January this year, basic passenger cars traded a total of 891,500 units, an increase of 2.59% year-on-year; SUVs traded a total of 186,300 units, an increase of 23.87% year-on-year; 83,300 MPVs were traded, an increase of 2.27% year-on-year; and crossover passenger cars were traded 33,200 units, an increase of 3.36% year-on-year.
Judging from the data, SUV models are obviously more popular with consumers.
3) "Small age car" is in demand
From the perspective of the age structure, the transaction volume of used cars in January this year was the largest in 3-6 years, accounting for 34.5%, but it fell by 2.77 percentage points from the same period last year; from the perspective of the whole year of 2021, the age of used cars was also concentrated in the 3-6 year range, with a transaction volume of 6.3559 million vehicles, accounting for 36.14% of the total transaction volume, accounting for 1.62% of the same period of decline, and this proportion was also the fourth consecutive year of decline since 2017, and this year began, this data fell again.
At the same time, the proportion of models with a service life of 3 years increased in January this year to 29.67%, an increase of 7.54 percentage points over the same period last year; while in 2021, models with an age of less than 3 years traded a total of 4.148 million vehicles, an increase of 17.3% compared with the same period, accounting for 23.59% of the total transaction volume.
This is due to the insufficient supply of the new car market, which has led many consumers to set their sights on the junior new car market; therefore, the used car trading volume aged within 3 years has shown a great increase.
In addition, used cars aged 7-10 years accounted for 22.09% of the transaction volume in January, down 2.63 percentage points compared with the same period last year; while the proportion of models aged in 7-10 years decreased by 0.16 percentage points compared with last year, accounting for 24.06% of the total transaction volume, with a total of 4.2308 million vehicles traded.
It is worth mentioning that with the growth of Car Ownership in China, the source of used cars with long car age has also increased year by year, or because of this, the proportion of vehicles with more than 10 years of age in the transaction volume has increased year by year. In 2017, the trading volume of models with a age of more than 10 years accounted for only 9.72%, while in 2021, a total of 2.8505 million vehicles with an age of more than 10 years were traded, and the transaction volume increased by 29.1% year-on-year.
However, this trend did not manifest itself in the used car market in January this year. According to the data, the proportion of models with an age of more than 10 years in January this year was 13.74%, down 2.15 percentage points compared with the same period last year.
Overall, in the second-hand car market, 3-6 years of models are the most popular, and there is a trend of further aging, while models more than 10 years old do not seem to have too many advantages in the market, so although the proportion has increased, it is also the model with the least contribution.
4) 2022 or more than 19 million vehicles?
For February, the China Automobile Dealers Association expects that the trading volume will still show a downward trend due to the Spring Festival holiday compared with January, but it is expected to have a slight growth trend compared with February 2021. As for 2022, Li Xin, director of the Information Department of the China Automobile Dealers Association, predicted that the trading volume of used cars on the mainland is expected to exceed 19 million, with a growth rate of about 9%.
She said, "In 2022, the introduction of the vat policy to reduce the second-hand car distribution model, and the 2021 second-hand car inter-provincial communication policy have been introduced, canceling unreasonable restrictions in second-hand car transactions, and a series of policies have continued to activate the second-hand car market." ”
Not only that, according to the use cycle of car users, 4-6 years is a regular car replacement cycle, that is, the purchase of new cars in 2016 has basically entered the active period of car replacement. From 2016 to 2018, China's new car sales exceeded 28 million for three consecutive years, so from the perspective of ownership and market law, the second-hand car trading volume from 2022 to 2024 will enter a new active period.