China sec­ond­hand ve­hi­cle sales ex­pected to soar this year

The Pak Banker - - 6BUSINESS -

Sales of sec­ond­hand cars in China are ex­pected to hit a new high this year af­ter the State Coun­cil re­leased a guide­line on March 25 to stim­u­late the sec­tor's devel­op­ment.

The eight-ar­ti­cle doc­u­ment ad­vises that cities out­side the Bei­jing-Tian­jinHe­bei, Yangtze River Delta and Pearl River Delta re­gions lift their ban on used cars be­ing im­ported from other re­gions by June. The ban, which has been in place in about 300 cities, has been seen as a ma­jor ob­sta­cle to trad­ing in used cars in the coun­try.

The guide­line also urges lo­cal gov­ern­ments and rel­e­vant or­ga­ni­za­tions to en­hance their ef­forts in such as­pects as en­sur­ing the reg­is­tra­tion of sec­ond­hand cars, mak­ing main­te­nance in­for­ma­tion avail­able, ap­ply­ing sales tax and pro­vid­ing fi­nan­cial sup­port. "We an­tic­i­pate strong growth in the num­ber of sec­ond­hand cars traded this year, at least ex­ceed­ing 10 mil­lion units," said Xiao Zhengsan, China Au­to­mo­bile Deal­ers As­so­ci­a­tion's sec­re­tary-general.

Last year, there were 9.4 mil­lion trans­ac­tions of sec­ond­hand cars. Ac­cord­ing to the or­ga­ni­za­tion's sta­tis­tics, 806,300 used cars were sold in Jan­uary across the coun­try, a 6.47 per­cent growth year-on-year, with those that have been used for six years ac­count­ing for al­most 47 per­cent.

Xiao said there will be a mar­ket in­flux of cars with around that much mileage be­cause a high num­ber of peo­ple who pur­chased cars around 2010, a year that saw a surge in car pur­chases in the coun­try, are about to buy new cars this year, which is in line with China's car con­sump­tion pat­terns.

He said that a fa­vor­able tax pol­icy on car pur­chases that ex­pires by the end of this year is also be­hind the pur­chases of new cars. Ac­cord­ing to a pol­icy is­sued in Septem­ber that those who pur­chase ve­hi­cles with an en­gine of 1.6 liters or smaller are en­ti­tled to pay half of the pur­chase tax.

Sev­eral other poli­cies are ex­pected to help spur trans­ac­tions of sec­ond­hand ve­hi­cles. Xiao said the na­tional V emis­sion stan­dards would not ap­ply to used cars, adding that the strict stan­dards were caus­ing panic among some deal­ers as they would take ef­fect from April in 11 mu­nic­i­pal­i­ties and prov­inces in east­ern China.

Shen Danyang, a Min­istry of Com­merce spokesman, said on March 17 that the min­istry is work­ing on a draft about used cars as part of ef­forts to boost car sales in China.

He said the reg­u­la­tion will be pro­mul­gated soon now that sug­ges­tions had been so­licited and ex­perts would be or­ga­nized to fur­ther im­prove it.

Shen's words came af­ter Premier Li Ke­qiang said in his gov­ern­ment work re­port de­liv­ered at the re­cently con­cluded two ses­sions that China would en­cour­age the devel­op­ment of the sec­ond­hand car mar­ket. Shen es­ti­mated that about 36 mil­lion used cars would be traded each year con­sid­er­ing that China's new car sales stood at 24 mil­lion units last year.

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