The Parallel Export Of New Energy Drives China’S Second-Hand Car Exports To Exceed 100,000 In 2023

In June 2023, the volume and price of used car transactions both rose month-on-month, and the cumulative transaction volume in 1H23 hit a new high in the past six years; the absolute increase in second-hand basic passenger cars in 1H23 was significant, and the relative increase in second-hand SUVs and trucks was significant.

China’s used car market is expected to maintain a stable upward trend in July, and it is optimistic that the export volume of used cars will increase throughout the year: Considering the recent promotion of automobile consumption in various places, a large number of high-quality used cars flooding into the market, and policies that have simplified the used car transaction procedures, We expect that the upward trend will be maintained in the fourth week of July, and the total transaction volume in July may reach 1.57 million vehicles, +9% year-on-year. In terms of exports, there are about 50,000 vehicles from January to May in 23 years. Considering that there is a large arbitrage space for second-hand car exports and there is still a supply gap in Russia and countries along the Belt and Road, we expect that China’s second-hand car exports may exceed 100,000 in 2023 , and is still dominated by parallel exports of new energy.

(Image: Export value of used cars in China since 2019)

Core Point Of View

In June 23, the volume and price of second-hand car transactions rose month-on-month, and the cumulative transaction volume in 1H23 hit a new high in nearly six years

In June 2023, the transaction volume of the second-hand car market will be +2.5%/+40,000 from the previous month, and +8.2%/+120,000 to 1.53 million from the same period last year, approaching the transaction volume in June 2021, and the transaction volume will be +4.4% from the previous month to 1.53 million. 97.3 billion yuan, the transaction volume of bicycles was +1,192 yuan to 63,500 yuan month-on-month; the cumulative transaction volume in 1H23 was +15.6% year-on-year/+3.9% month-on-month to 8.77 million vehicles, an increase of 330,000 vehicles compared with the transaction volume in 1H21, setting a record in the past six and a half years The annual cumulative transaction volume reached a new high, with a cumulative transaction volume of 551.7 billion yuan.

1H23 The absolute increase of second-hand basic passenger cars is significant, and the relative increase of second-hand SUVs and trucks is significant

From a structural point of view, the used car transaction volume of passenger cars/commercial vehicles in June 2023 increased by 2.39%/+2.35% month-on-month to 1.23 million/220,000 units, and the cumulative transaction volume of passenger cars/commercial vehicles in 1H23 increased by 15.5% year-on-year /+10.72% to 7.04 million units/1.25 million units, of which the absolute value of second-hand car transactions contributed most to basic passenger cars (1H23 transaction volume accounted for 63%), and the relative value of incremental growth was relatively fast. SUVs and trucks: Used SUVs +7.8% YoY to 200,000 units in June 2023, +15.2% YoY to 1.12 million units in 1H23, an increase of 23%/210,000 units compared to 1H21; second-hand trucks grew even more significantly, 1H23 +19.51% year-on-year to 720,000 units, an increase of 120,000 units compared to 1H22, slightly higher than the level of 1H21. From a regional perspective, East China and Central South are the main trading places for used cars in my country. In 1H23, they respectively accounted for 30% of the total transaction volume. In recent years, the used car transaction volume in Northeast China has increased significantly. The transaction volume in 1H23 increased by 55% year-on-year, accounting for 7%. .

There is a large arbitrage space for the export of new energy second-hand vehicles, and it is expected to continue the strong growth trend

my country started the export of second-hand cars in 2019. In 2022, the export volume of used cars was about 70,000, and in January-May, 2023, it was about 50,000. 550 million U.S. dollars, 8,000 second-hand commercial vehicles were exported, with an export value of 60 million U.S. dollars, and 23,000 second-hand new energy vehicles were exported, with an export value of 530 million U.S. dollars. Among them, the parallel export of new energy vehicles is an important driving force for the growth of the second-hand car export market, accounting for 80%+ (as of 2023.6). We believe that the large arbitrage space is the key to the continued growth of this market: the unit price of my country’s second-hand car exports in 2021-1H22 will increase from 1.5 10,000 U.S. dollars rose to 23,000 U.S. dollars, an increase of 53%, and the arbitrage space for the export of new energy used cars is even more significant.

The Belt and Road Initiative contributes 80% of used car exports, and there is a blank supply opportunity in the Russian market

From a structural point of view, countries along the Belt and Road are currently my country’s main second-hand car export markets. In 2021-1H22, the United Arab Emirates/Jordan/Uzbekistan/Ukraine/Nigeria accounted for 69% of my country’s used car exports and 80% of the total export value. We believe that there is a blank supply opportunity in the Russian market, mainly because Russia is the main exporter of Japanese used cars. In 21 years, it accounted for 13% of Japan’s total used car exports / contributed 160,000+ exports. The increase in sea freight has hindered Japan’s exports to Russia. We believe that my country’s new energy second-hand cars are expected to enter this window and occupy more of the Russian market’s export share.

In July, my country’s second-hand car market is expected to maintain a stable upward trend, and we are optimistic about the high growth of second-hand car exports throughout the year

In the fourth week of July, the average daily trading volume of used cars in my country was +200 month-on-month/+1100 year-on-year to 58,800, which was basically the same as the level of the second week; as of the 23rd, the cumulative trading volume of used cars in 23 years reached 1.18 million. Year-on-year +35,000 vehicles. Considering the recent automobile consumption promotion activities in various places, the influx of a large number of high-quality second-hand car sources into the market, and the simplification of the second-hand car transaction procedures on the policy side, we expect the upward trend to be maintained in the fourth week of July, and the total transaction volume in July may reach 1.57 million vehicles , +9% year-on-year. In terms of exports, there will be about 50,000 vehicles from January to May 2023. Considering that there is a large arbitrage space for second-hand car exports and there is still a supply gap in Russia and countries along the Belt and Road, we expect that my country’s second-hand car exports may exceed 100,000 in 2023 , and is still dominated by parallel exports of new energy.