The First in the District! Yuecheng Second-hand Cars Approved to Go Overseas
2024-07-31
In recent years, with the global automotive electrification trend gaining momentum, China's new energy vehicles are rapidly capturing overseas markets. In the vast overseas Chinese car sales market, domestically produced used cars are gaining popularity as a hot track for Chinese products to go global, thanks to favorable policies and high profit margins.
Recently, Shaoxing City Used Motor Vehicle Trading Market Operation Co., Ltd. successfully completed the second-hand car export filing, which is also the first enterprise in Yuecheng District to complete the second-hand car export qualification filing, which is of milestone significance to the local second-hand car export.
The Shaoxing Second-hand Motor Vehicle Trading Market was established in 1998, being the first used car market in Shaoxing City and the only state-owned used car trading market within Yuecheng District. In recent years, the company has successfully transformed from a traditional trading market responsible only for second-hand vehicle transfers to a used car dealership through methods such as selling via internet platforms and building a customer service system. In 2023, the market's cumulative vehicle transaction volume reached 13,067 units, with annual revenue approaching 8 million yuan. This year, under national policy support, the Shaoxing City Second-hand Motor Vehicle Trading Market, which has accumulated dealership experience and a customer base, is determined to venture into overseas markets.
"The domestic used car market, although large, is relatively saturated, and going overseas represents a new blue ocean for many domestic used car dealers." Wang Chun, the Party Branch Secretary and Chairman of Shaoxing City Second-hand Motor Vehicle Trading Market Co., Ltd., told reporters that while domestic new energy vehicles face intense competition, they are in high demand abroad, especially among established automakers like Geely and Chery, which are particularly popular in regions such as Africa and the Middle East.
Where there is demand in the market, there is supply from enterprises. As early as 2019, the Ministry of Commerce, the Ministry of Public Security, and the General Administration of Customs launched the second-hand car export business in some regions with mature conditions, including Beijing, Tianjin, Shanghai, Zhejiang (Taizhou), Shandong (Jining), Guangdong, Sichuan (Chengdu), shanxi (Xi'an), Qingdao, and Xiamen, among 10 regions, marking the official start of the high-speed growth era for Chinese cars going global. At that time, although Shaoxing was not included in the pilot cities, Wang Chun, sensing the business opportunity, had already begun to make strategic moves in advance.
In 2021, we began to stock up on appraisal rooms to lay the foundation for used car dealership. Over the past two years, through introductions from peers, the company has also accumulated a batch of preliminary overseas clients. It was precisely due to Wang Chun's early preparation that at the beginning of this year, the Ministry of Commerce and four other ministries issued the' Announcement on Matters Concerning Used Car Exports,' clearly allowing the export business of used cars nationwide. Shaoxing City Second-hand Motor Vehicle Trading Market Co., Ltd. then began preparing for filing and declaration. 'With the patient service and strong support from the local government, the company successfully completed the export filing in just two months. '
According to the data released by the China Automobile Dealers Association, from 2021 to 2023, China's used car exports increased from 15,000 units to 160,000 units. Most of these exports were made through the "parallel export" model by traders heading to overseas markets.
So-called 'parallel export' refers to exporting new cars under the guise of used cars in order to make a profit from the price difference. However, according to Wang Chun, the sales model of 'parallel export' is not a sustainable strategy. "Compared to 'zero-kilometer used cars,' ordinary used cars with lower profit margins are more stable and also test the company's after-sales service capabilities." Wang Chun explains that each local person has different preferences for cars, and after used cars are exported overseas, there are numerous uncertainties during the user's usage process. Only by establishing a comprehensive after-sales service system can the export business of used cars maintain continuous growth.
"Second-hand car exports are a 'new form of business' in foreign trade development. We will work with relevant departments to continuously optimize export business processes and increase support for second-hand car export enterprises, striving to cultivate second-hand car exports as a new growth point in foreign trade for Yuecheng District and even Shaoxing City. " A relevant official from the Yuecheng District Business Bureau stated that they will encourage Shaoxing City Second-hand Motor Vehicle Trading Market Co., Ltd. to leverage the advantages of state-owned enterprises in operating and strive to expand motor vehicle dealership business, gradually achieving second-hand car export business and building a high-quality brand for second-hand car exports.