Chinese automobile consumers are increasingly switching their allegiance to use vehicles instead of purchasing new cars.
Although there are some car manufacturers, including Cadillac, who are doing very well in the Chinese Market right now, you are much more likely to see the average Chinese motorist buying used Ford C-Max cars than you are a brand new model just off the production line. This is something few people would have predicted even five years ago.
Sales in a Slump
Sales of new vehicles rose by only 1.9 percent between January and November if 2017, which is a bit less than the global average of 2.7 percent with many analysts believing that the slump is down to a recent increase in buyers going for used cars, rather than the Chinese population buying fewer vehicles overall.
Not so Novel
Fox Business have reported that although it was something of a novel, and a status symbol for relatively well of Chinese people to purchase brand new vehicles, the novel is starting to wear or and more Chinese car dealerships are adopting the same model as the United States whereby they are offering both new and used cars for sale in the same place. One example of this would be GM who’s Chinese dealerships – there are 1,600 of them – are now selling used cars. Another would be Ford who are selling used cars in around 640 of their 800 Chinese automobile dealerships.
A Behavioral Shift
This move towards used cars represents a significant shift in the behavior of the Chinese consumer because, whereas here in the US many more people buy used cars than new vehicles, in China is had always been the opposite with new car sales outnumbering used two to one. For better or worse, this is something that is fast changing, and the China Automobile Association believe that in just two short years, the Chinese will be buying more used cars than new for the first time ever.
It should not, perhaps, be surprising that there has been such as shift because as the market and its customers mature, there will be more used cars available for sale then there were in the past when a used car was pretty difficult to come by and could only be purchased from its first owner. Even the Chinese middle classes are out to find a bargain, and if they can find a used car that is just as good as a new one, for a much lower price, well most of them aren’t going to pay for the more expensive option – this is something more of them are working out, and their behavior is changing as a result.
According to one car dealer in Ningbo, which is not far from the affluent municipality of Shanghai, this is exactly what is happening – the well to do Chinese have worked out that it’s hard to tell the difference between a brand new Ford and one that’s a few years old and that has prompted this shift in the way cars are bought and sold.
Right now, most used cars in China are sold in private lots, but as the market gets bigger, we can expect to see more affiliated dealerships springing up around the country.