EV&online marketplaces thrive despite slump in Chinese car sales

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China’s massive auto market hit the brakes last year as trade tensions and a softening economy dampened consumer confidence, but one segment soared on account of increasing internet penetration — used car sales.

New passenger car sales fell to 23.7 million last year, representing a 4.1 year-over-year drop according to a new report by China's Association of Automobile Manufacturers, the country’s top auto association. That marks the very first annual decline in the world's biggest car market since the 1990s.

A few factors were at play. For one, the tit-for-tat U.S.-China trade war has led to a slew of tariffs on U.S. car imports and weighed on consumers. The standoff prompted Tesla to cut prices for Model 3 in China and Jaguar Land Rover to temporarily close a factory after sales plummeted in the country. Internally, China is coping with a cooling economy that has undermined consumer demand across a spectrum of sectors. Regulators have also rolled back a tax-cut scheme on smaller cars that began in 2017.

Despite the overall industry slowdown, electric and hybrid vehicles continued to enjoy a healthy growth rate at 61.7 percent to clock sales of 1.26 million new units. That comes as expected as China is aiming to cut carbon footprints and lead in the global alternative energy revolution by splurging on subsidies for both consumers and manufacturers. But stumbling blocks remain for the budding industry, such as a lack of charging stations. Beijing is also mulling subsidy cuts on EVs to temper overcapacity in the long term.

As consumers tighten their purse strings amid the economic downturn, cheaper secondhand cars become more appealing. China's Automobile Dealers Association shows that secondhand car sales reached 12.6 million for the first 11 months of 2018, marking a 13 percent growth.

The sector is only half the size of new cars, but a string of e-commerce channels are fueling the industry in a country where in-person transactions were still the norm just a few years ago. For one thing, online marketplaces inject honesty to the car-buying process by claiming to provide more price transparency for customers. A major turning point came in 2017 when China lifted constraints on cross-provincial used car deals, which means customers in less developed regions — many of whom never owned a car before — now have access to a greater variety of models compared to what's available in their hinterland homelands.

Some of the top players in the space include Didi Chuxing-backed Renrenche, Tencent-backed Guazi and Uxin, which floated on the Nasdaq last year and recently entered a strategic partnership with Alibaba. In 2017, e-commerce transactions accounted for 17.6 percent of overall car sales in the country, a study from Uxin's research institute found.

"Over the past few years, consumers have become increasingly receptive to buying used cars as a cost-effective alternative to new vehicles. This is particularly the case for consumers in lower-tier cities," said Kun Dai, founder and chief executive officer of Uxin . "With extremely limited used car selection in most cities, there is a rapidly growing demand for an online platform that expands access to used cars from across the country."

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Blagoje
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Auto sales for new vehicle are slow and gradual.

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@Dragon #1

Auto sales for new vehicle are slow and gradual.

 Yes, economic recession affecting business.

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Waw

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占楼

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车好看

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@夏夜 #5

车好看

 是 Future technology Subaru 款式的

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@BAREP #3

Waw

 Thank you for your support 

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我还有体力

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one

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two

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good

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perfect

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@夏夜 #12

perfect

 Haha..You have a power 

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I'm sorry to tell you , I can't understand the article content 

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support

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Recon cars are in demand 

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Good nite

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@TRVC是个好币! #14

I'm sorry to tell you , I can't understand the article content

 This article talk about electric vehicle demand growing despite slumped of China automobile.

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@TRVC是个好币! #15

support

 Thanks for your great support 

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@Pemo168 #17

Good nite

 Good night and sweet dream

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@Pemo168 #16

Recon cars are in demand

 Actually, surging demand of electric vehicle keep increasing 

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Demand for an online platform that expands for used car also increasing

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Fantastic, i have read lots of material of AUTO drive, it is really interesting.~~~

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