China accelerates pace of second-hand car exports

Over the past five years, China has made remarkable progress in exporting used cars, with many practices that are replicable and can be applied elsewhere in the country. This has helped promote the stability, scale and structure of foreign trade, and facilitate the upgrading of domestic auto consumption.

China's used car exports industry is gradually expanding. Since the launch of a pilot program for the exports of second-hand cars in 2019, the volume of the country's used car exports has increased multiple times. Customs data shows that China's used car exports surged over 350 percent year on year to 69,000 cars in 2022 from about 15,000 units in 2021.

Workers offer car maintenance services at a 4S store of the auto brand Lynk&Co in Shapingba district, southwest China's Chongqing Municipality. (Photo/Sun Kaifang)

New energy vehicles (NEVs) account for a considerable proportion of China's used car exports. North China's Tianjin Municipality is one of the first pilot cities for such exports. Used car export enterprises in the Dongjiang bonded zone in Tianjin have exported engineering vehicles, commercial vehicles, traditional energy and new energy passenger vehicles, and other car models in recent years. At present, second-hand NEVs make up more than 70 percent of the bonded zone's total used car exports.

The target markets for Chinese used cars have been expanded. At the used car forum of the 2023 annual conference of China's automotive distribution industry, Luo Lei, assistant to the president of the China Automobile Dealers Association, said that the country's used cars had been exported to over 140 countries and regions, thanks to the joint efforts of the entire industry.

The export destinations for Chinese used cars are mainly five Central Asian countries, Africa, and some Southeast Asian countries. Since 2022, Russia has become an important market for China's used car exports.

Since last year, the Russian market has continued to perform well, and the European market has also been activated, said an executive of a used car export company, adding that China's used car exports to Western and Eastern Europe affected by an energy crisis have increased significantly.

Export procedures for Chinese used cars have also been further simplified, and the used car export industrial system has been improved.

China's used car exports have great potential, said Xu Haidong, deputy chief engineer of the China Association of Automobile Manufacturers (CAAM), explaining that the country's used cars need new markets due to a huge number of vehicles and the rapid speed of phasing out cars. China saw 435 million motor vehicles on the road in 2023.

The large-scale development of China's used car exports is propelled by robust policy support.

Photo shows cars to be exported at the international container terminal of Taicang Port area of Suzhou Port, east China's Jiangsu Province. (Photo/Ji Haixin)

In July 2023, the National Development and Reform Commission and other departments issued several measures to promote automobile consumption, including supporting and encouraging the export of used cars that meet relevant quality standards. In September of the same year, five departments including the Ministry of Commerce (MOFCOM) released a draft guideline to comprehensively support used car exports.

To promote the healthy and orderly development of China's used car exports, the MOFCOM and four other departments issued a notice on Feb. 7, 2024 to carry out used car export businesses nationwide.

Against the backdrop of China's automobile production and sales both exceeding 30 million units, launching used car export businesses across the country meets the trend of the upgrading and replacement of the domestic auto market, and is conducive to meeting the demand for used cars in other countries, especially in countries participating in the Belt and Road Initiative, said Zhang Jianping, deputy director of the academic committee of the Beijing-based Chinese Academy of International Trade and Economic Cooperation at the Ministry of Commerce.

However, the country's used car export business remains in the early stages of development, Zhang said, and urged the need to learn from the successful experiences and practices of countries like Japan and South Korea, and combine the characteristics of China's used cars and export destinations' policies and regulations to develop better business models.

Zhang added that China needs to export used cars and make sure that they have a good reputation overseas.