Following last year's horn for the comprehensive export of second-hand cars in the mainland, attracted by a series of favorable policies and strong international market demand, enterprises inside and outside the industry are competing for this field, and related service agencies have also sprung up.
However, in terms of quantity, the scale of mainland second-hand car exports is still very small, and the export volume of mainland second-hand cars will exceed 100,000 units in 2023, which is only a handful of 2% compared with the overall automobile export scale of 4.91 million units, and most of them are zero-kilometer parallel export cars.
With the increasingly fierce domestic competition and the increasing policy risks in overseas markets, the era of practitioners relying on parallel exports to make quick money is becoming a thing of the past.
Backed by the world's largest automobile producer and consumer, the mainland has an unrivalled abundant supply of vehicles. Some industry organizations predict that in 2024, 2025 and 2026, the export volume of used cars in mainland China will exceed 400,000, 500,000 and 600,000 units.
01
Used car companies on the world stage
With the continuous growth of domestic car ownership, the transaction volume of second-hand cars is also increasing year by year. In this context, second-hand cars going out has become a topic of great concern.
Since 2019, when the mainland started the pilot work of second-hand car export, with the joint efforts of government departments, industry associations and enterprises engaged in export-related business, the export of second-hand cars has shown a rapid development trend and achieved remarkable results. According to customs data, the mainland's second-hand car exports in 2021 will be about 15,000 units, which will jump to 69,000 units in 2022, a year-on-year increase of more than 350%, and by 2023, it will exceed 100,000 units in one fell swoop. From the initial exploration stage, it has now established a growing second-hand car export system and industrial chain, with the export volume increasing year by year, and the export models are becoming more and more diversified. The second-hand car export market involves Europe, America, the Middle East, Africa and other regions, and has become a new force to boost the development of the mainland second-hand car industry.
"The export of used cars not only contributes to the sustainable development of the mainland auto industry, but also represents a new journey for Chinese auto brands to go global. Xiao Zhengsan, vice president and secretary general of the China Automobile Dealers Association, said that the mainland has rich second-hand car resources and a wide variety of models, which can provide diversified and high-quality second-hand cars for overseas customers. This is a huge advantage for the mainland to expand the export trade of second-hand cars, but it is also necessary to be soberly aware that there are opportunities and challenges. For example, the current competition in the second-hand car market is becoming increasingly fierce, brand building and marketing are facing certain pressures, the analysis and grasp of overseas target markets have more uncertainties, the export procedures are complex, and the logistics costs are high, which will affect the smooth progress of the second-hand car export business.
Xiao Zhengsan further pointed out that in the face of these challenges and difficulties, on the one hand, government departments need to strengthen top-level design and improve the export system. On the other hand, the association will also strengthen research and provide policy suggestions to government departments to provide more powerful policy support for the development of second-hand car export business. At the same time, the association will also build a second-hand car export service platform, aggregate various resources, and realize resource sharing, with the aim of cultivating a large number of professional second-hand car export traders, and promoting more "Made in China" and "Chinese brand" second-hand cars to the world, so that our second-hand car enterprises can enter the world stage.
02
The parallel export window is only 2 to 3 years
With the rapid improvement of China's automotive technology, the gradual growth of brands, and the rapid development of the new energy vehicle market, it is expected that the export of second-hand cars will enter the fast lane of development in the future and continue to show a rapid growth trend.
Japan, the United States, South Korea and other automobile powers have been carrying out second-hand car export business for more than 20 years, with a complete export system, mature market and stable scale. Since 2015, Japan's exports have been stable at about 1.2 million units per year, and it has been the world's top exporter of used cars for many years, exporting to 180 countries and regions. The United States exported nearly 1 million used cars in 2019, hitting a stage high. In recent years, the annual export volume has basically remained at the scale of 800,000~900,000 vehicles, and has been exported to more than 230 countries and regions. The scale of South Korea's used car exports fluctuates greatly, with an annual export volume of nearly 500,000 units at its peak, and a total of 166 countries and regions are exported.
Liao Zhiyong, assistant to the chairman of Guangdong Haoche Holdings Co., Ltd., said that from the perspective of the mainland's automobile export trend, the automobile export volume in 2017~2023 will gradually rebound. In 2023, 37% of vehicles will be exported to Europe, far more than other regions. Recently, the developed markets of Europe and North America have seen strong demand, and the market share of mainland used car exports in these two regions has increased. In the next two to three years, the mainland's new car exports and parallel exports can be coordinated to continue to strengthen the penetration and coverage of developed automotive markets. The market demand in underdeveloped regions is unstable, such as the average performance of the African market, the poor South American market, and the weakening market in Asia, so it should be used as the main target market for real second-hand car exports (different from zero-kilometer parallel export cars) in the next 3~5 years.
With the further recognition and recognition of Chinese auto brands and technical strength in overseas markets, the export volume of Chinese automobiles, especially new energy vehicles, will continue to grow, and drive the substantial growth of second-hand car exports, as well as the gradual improvement of sales channels and after-sales systems.
It can be judged that in the past two years, new energy parallel export vehicles and real new energy second-hand cars have gradually become a new force in the export of second-hand passenger cars, but in the long run, the scale is limited, the time window may be 2~3 years, and the competition is becoming increasingly fierce. With the price reduction of mainland automobiles, the completion of the export system, the reduction of overall operating costs, the extensiveness of overseas customer groups, and the improvement of the competitiveness of second-hand cars, the real second-hand car export business will enter a stage of rapid development.
03
The export of new cars and used cars complements each other
In fact, automakers around the world are worried about parallel exports, mainly from cross-regional cross-border shipments by traders and dealers, disruption of local channels and market prices, lack of after-sales service, violations of laws and regulations, and infringement of intellectual property rights.
In this regard, Liao Zhiyong suggested that automobile manufacturers should be sparse rather than blocking parallel export cars, and they can disclose the global market layout, planning, agency conditions, etc., and cooperate with exporters to expand overseas markets. Through fair competition, comprehensive consideration, and selection of the best. At the same time, export management regulations can also be formulated, all parallel export volume into the performance scope of overseas agents, to ensure that the interests of the channel are not damaged, to maintain policy consistency, to ensure that the channel price system is not chaotic, to establish a record system, exporters and business must be recorded, otherwise manufacturers, 4S stores do not sell cars. OEMs and exporters jointly carry out market research, create popular models, joint promotion, and resource sharing.
In terms of after-sales, resources can be shared to ensure that the rights and interests of customers are consistent. OEMs provide exporters and customers with supporting services, such as technical guidance and training, remote technical support, overseas after-sales sharing, parts supply, charging pile configuration, vehicle system flashing, new energy vehicle transportation required data sharing, etc. OEMs can also organize domestic 4S stores and other distribution channels to connect with exporters, share vehicle sources, joint exports, innovate OEM customization models, accept batch customization needs of new overseas brands, provide supporting technical information to assist in overseas testing and certification, etc., and provide KD parts for overseas assembly cooperation.
Many people in the industry believe that the export of second-hand cars and the export of new cars are not a competitive relationship, which will not crowd out and affect the export business of new cars, but a complementary and co-promotion relationship, that is, the export of new cars and second-hand cars can achieve brand experience and market scale, cost reduction and efficiency increase, and after-sales service. Therefore, it is recommended that major OEMs attach importance to the second-hand car export sector, strengthen cooperation with domestic second-hand car export enterprises, and jointly build and share the development of overseas markets. OEMs should strengthen the requirements for brand services, technical support, parts supply, marketing guidance, and channels for export enterprises to ensure brand image and market order.
04
Investor determination is the difference between success and failure
Sun Hehong, chairman of Guohetong (Shanghai) Supply Chain Co., Ltd., pointed out that the second-hand car export chain is long and complex, and the strength of the supply chain capacity is the key to whether the business can be done well. The competition in the future is not the competition between enterprises, but the competition between supply chains. He introduced that the supply chain is guided by customer needs, with the goal of improving quality and efficiency, and the integration of resources as a means to achieve efficient coordination in the whole process of product design, procurement, production, sales, and service.
With the development of information technology, the supply chain has developed to the stage of smart supply chain that is deeply integrated with the Internet and the Internet of Things. The trend of the second-hand car export supply chain is service integration, collaboration and platformization, including logistics, identification, maintenance, finance, certification and after-sales services. Among them, trade, logistics, and finance can be online and visualized, while procurement, certification, logistics and transportation, and after-sales need to be offline. The service should be domestic and international, efficient, low cost and reliable.
Not long ago, Shandong Yuantong Automobile Trade Group Co., Ltd. obtained the second-hand car export qualification, and the second-hand car export team went to many countries for market investigation. Zhou Jingxia, assistant to the president of Shandong Yuantong Automobile Trade Group Co., Ltd., said that the advantage of the automobile dealership group is that it has formed a stable cooperative relationship with many automobile manufacturers, and has a good foundation in vehicle maintenance.
"When an enterprise carries out the second-hand car export business, the determination of the investor is very important. Zhou Jingxia said that dealers need to cooperate with manufacturers to carry out second-hand car business, and first prepare second-hand cars, and then export products are more secure. In addition, getting the general agent qualification of parts and components brands is also conducive to overseas signing. In terms of marketing, you can find local sales or influencers to shoot videos on a regular basis, and use local websites to deepen consumer impressions.
According to Zhou Jingxia, the main business of Shandong Yuantong Automobile Trade Group Co., Ltd. includes vehicle source inquiry services, vehicle procurement services, vehicle channel services, TIR integrated customs clearance services, overseas customs clearance and listing services, which can collect car payments and service fees. In terms of the construction of the automobile export service platform, the dealer group cannot have advantages in every link, so it is necessary to grasp its own advantages and do a good job in the construction of the ecological chain.
05
The export of genuine used cars will also reflect the advantages
Li Jia, general manager of the used car division of CAR, introduced that all the car sources of CAR come from the main engine factory directly, and the whole process is self-operated and maintained, and when converted into used cars, it will also be tested and certified by Dr. Cha and the enterprise system. Therefore, car rental companies are undoubtedly high-quality used car source manufacturers. In 2023, CAR will produce and sell more than 50,000 used cars, accounting for 30% of the total 150,000 vehicles, with an average age of two and a half years. In March 2024, CAR obtained the export qualification, and this year's goal is to export more than 1,000 used cars.
Li Jia said that in China, CAR is the provider of car sources and is only responsible for selling cars. After entering the export field, Lianyu (Tianjin) Automobile Sales Co., Ltd., which has obtained export qualifications, can obtain export tax rebates, and can earn trade price differences by selling vehicles to transit countries, and can also obtain terminal price differences when selling to dealers or retailers in terminal countries.
"The era of high profits for parallel export cars has passed, and domestic companies should respond to national policies and study what should be done for the export of real used cars. According to international experience, the international trade of second-hand cars has about 10% of the profit, which is worth deepening. Li Jia bluntly said that after research, it was found that the export channel of used cars is similar to that of new cars, and the main destinations are none other than Central Asia and Russia, the Middle East and Africa, and Latin America. Moreover, the current domestic price of new fuel vehicles is falling rapidly, making China's second-hand car prices quite competitive. For example, the price of a two-year-old second-hand car with a mileage of 50,000 kilometers in China is lower than that of the United Arab Emirates, Russia, Japan, South Korea and other countries.
"As a second-hand car export enterprise, it needs to have five capabilities, namely, good OEM relationship, large capital flow, trust endorsement, efficient and high-quality service, and smooth sales channels. Fang Xuefei, general manager of Yuantong International, believes that parallel export cars are only a phased product, and sales will naturally shrink, and the real second-hand car export market should be aimed at African and American countries. At present, the reason for the small export volume of real second-hand cars is that the current domestic second-hand cars are not obvious compared with new cars, and the price fluctuations also affect the development of the industry.
Zhou Jingxia said that the significance of parallel export cars is to promote the brand, and the target customers should be locked in high-end customers. According to the survey, there is also a market for new energy second-hand cars within one year of vehicle age, which is mainly driven by customer demand. At the same time, overseas dealers and individuals still have doubts about the condition of used cars in China, resulting in a small demand for real used cars. Russia, the Middle East, Africa, and South America are markets for genuine used car exports, and customers in these markets are highly price-sensitive.
06
System support makes it easy to export used cars
"The market fluctuates greatly, and policies, prices, and competition bring a rollercoaster-like experience. Overseas markets are gradually entering the buyer's market, and it is difficult to calculate online and offline input and output. After-sales problems gradually emerged, and local dealers were unable to solve after-sales. Fu Yi, assistant to the chairman of Huanyu Automobile and chief operating officer of Dobaan Automotive Technology, summarized the pain points of second-hand car exports.
In his view, the disadvantages of different owners in the current second-hand car export field are also obvious, such as the lack of funds for cross-border e-commerce and the lack of experience in purchase, sale and inventory management, the lack of teams in dealer groups, the high inventory risk and the difficulty in landing, and the lack of trade thinking and international trade experience for second-hand car dealers.
In response to the problems encountered by the above-mentioned entities, Dobaan Automotive Technology has developed a SaaS system, striving to reduce manual intervention in the process of second-hand car export and improve efficiency by more than 50%. Data-based decision-making can reduce decision-making errors, reduce business risks, and improve ROI. In addition, the application of cloud computing services can enable enterprises to save the cost of hardware investment and maintenance, realize the efficient use of resources, and at the same time help car dealers improve customer satisfaction and stickiness, and increase the share of the stock market.
Huo Xiaoliang, director of the international business department of Zhejiang Yanbao Technology Group Co., Ltd., said bluntly that most of the second-hand cars exported last year were new energy vehicles, but due to the supply constraints of technology and accessories, almost all overseas repair shops do not have the corresponding maintenance capabilities, and even the ability to replace assemblies and other accessories, mainly relying on domestic deployment and technical support. To this end, in October last year, Zhejiang Yanbao Technology Group Co., Ltd. launched the Ningbo Luban car maintenance project, through which the main engine factory and battery factory were authorized, professional and technical training, professional equipment and genuine parts supply, and the practice base of the industrial college cultivated students' practical ability, and sent overseas after becoming talents.
In December 2023, Luban Car Maintenance began to prepare for the provision of warranty services for the export of second-hand cars, and the Moscow Luban Car Maintenance Center was completed in Moscow Tianya International Auto Parts Center, positioning itself as a full-service standardized service center for China's second-hand cars going overseas, and is expected to be officially opened at the end of April this year. The project will fully cover the whole of Russia and Central Asia, taking the first step in the overseas chain operation of China's new energy auto repair. In addition, Luban also actively promotes bilateral cooperation between domestic and foreign institutions, and has been submitted to the official report of Kazakhstan, recognized by the Ministry of Transportation and the Ministry of Education, and has been invited to jointly promote the construction and formulation of relevant industry management standards, personnel training and battery echelon management.
While solving the problems of talent training and transportation, and improving maintenance services, Luban also plans to launch its own auto parts brand, build an overseas parts supply chain system, build an online platform for self-operated and authorized repair shops, and provide accessories and other services for other second-hand car users.
Text: Chen Meng Editor: Jiao Yue Layout: Wang Kun
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