China Automobile Dealers Association: A brief analysis of the used car market in May 2024

Overall performance of the used car market in May 2024

In May 2024, the national used car market transaction volume was 1.5846 million vehicles, a month-on-month decrease of 5.62% and a year-on-year increase of 5.87%, with a transaction amount of 102.331 billion yuan.

From January to May 2024, the cumulative transaction volume of used cars was 7.8639 million units, a year-on-year increase of 8.69%, an increase of 628,600 units compared with the same period last year, and the cumulative transaction amount was 527.392 billion yuan.

In May 2024, the transaction volume of the national used car market reached 1.5846 million vehicles, a month-on-month decrease of 5.62%, showing the volatility of market transactions and the current situation of weak growth. The main reasons for market fluctuations are two aspects:

First, from the perspective of the market environment, strong competition in the new car market has become an important factor affecting the status of the used car market. During the May Day holiday, many consumers who originally planned to buy used cars chose new cars due to the dual promotion of new car prices and local consumption promotion policies in various provinces and cities. This trend directly affected the transaction volume of the used car market, causing the overall transaction heat of the used car market to decline.

Secondly, the fluctuation of the new car price system has had a profound impact on the used car market. The fluctuation of new car prices in May has further prolonged the inventory turnover time in the used car market. The current average inventory cycle is 55 days. Car dealers have encountered difficulties in capital occupation, and their operating risks have increased accordingly. These factors have combined to bring forward the off-season for used car transactions. Traditionally, this off-season usually occurs in June, but now it has been brought forward to mid-to-late May. Of course, there are also some bright spots in this year's used car market. New energy used cars are beginning to emerge. Data shows that the number of new energy used cars in April was 89,000, an increase of 68% over the same period last year, which also indicates that the used car market will usher in a more diversified competition landscape.

To sum up, the characteristics of the used car market in May include the following aspects:

1. Changes in vehicle age structure: Second-hand cars within 3 years accounted for 24.86%, down 3 percentage points from the same period last year, indicating competitive pressure from nearly new cars.

2. The average price of used cars dropped: Affected by market competition and changes in consumer demand, the average price of used cars in May was 64,600 yuan, down 5,000 yuan from the highest point this year.

3. Active cross-regional circulation: In order to expand market coverage and ease inventory pressure, cross-regional circulation in the used car market continues to be active. The outward migration rate in May reached 28.8%, an increase of 2% over the same period, showing the liquidity and activity of the used car market across the country.

Faced with such market changes, used car dealers need to adjust their strategies quickly. It is imperative to prioritize inventory handling and retrieving funds to ensure a smooth transition during the upcoming traditional off-season in June and July. However, challenges and opportunities coexist. With the full implementation of the new policy for used cars, professional business entities have the conditions to fully carry out used car business. The policy level has solved the problem of dealers selling used cars as conveniently as new cars. The next key lies in how to make consumers feel as confident buying used cars as buying new cars at the market level. Only by establishing a sound integrity trading system can we eliminate consumers' concerns and increase the trading activity in the used car market. Through the integrity trading of used cars, the replacement and renewal speed up, so as to achieve the market goal of revitalizing the stock and expanding the increment.

Analysis of used car structure by model in May 2024

Passenger car situation: In May, a total of 919,300 basic passenger cars were traded, a decrease of 5.77% month-on-month and an increase of 3.59% year-on-year; a total of 210,000 SUVs were traded, a decrease of 6.03% month-on-month and an increase of 10.07% year-on-year; a total of 98,300 MPVs were traded, a decrease of 6.35% month-on-month and an increase of 6.29% year-on-year; a total of 38,300 crossover passenger cars were traded, a decrease of 5.41% month-on-month and an increase of 34.25% year-on-year.

Commercial vehicle situation: A total of 88,300 buses were traded, a decrease of 5.98% month-on-month and an increase of 1.41% year-on-year; 130,800 trucks were traded, a decrease of 4.78% month-on-month and an increase of 5.70% year-on-year.

In May, both passenger cars and commercial vehicles declined compared with the previous month, with passenger cars down 5.84% and commercial vehicles down 5.27% month-on-month. Year-on-year, both were better than the same period last year, with passenger cars up 5.56% and commercial vehicles up 3.93%.

From January to May, the cumulative transaction volume of passenger cars was 6.3187 million, an increase of 8.69% year-on-year. Among them: the cumulative transaction volume of basic passenger cars was 4.5881 million, an increase of 6.46% year-on-year; the transaction volume of SUVs was 1.0491 million, an increase of 13.55% year-on-year; the transaction volume of MPVs was 496,900, an increase of 13.13% year-on-year; and the transaction volume of crossover passenger cars was 184,700, an increase of 30.99% year-on-year.

A total of 1,064,900 commercial vehicles were traded, up 3.19% year-on-year, of which 620,100 trucks were traded, up 3.94% year-on-year, and 444,800 buses, up 2.17% year-on-year.

From January to May, the passenger car market grew rapidly year-on-year, among which the growth rate of crossover passenger cars exceeded 30%, and the growth rate of MPV and SUV models exceeded 13%. The year-on-year growth rate of commercial vehicles was relatively weak, among which the performance of cargo vehicles was slightly better than that of passenger cars.

Analysis of the age of used car transactions in May 2024

In May, the transactions of used cars with a service life of 3-6 years accounted for the largest proportion, accounting for 45.67%, a month-on-month increase of 1.69%, and a year-on-year increase of 3.04%; the models with a service life of less than 3 years accounted for 24.86%, a month-on-month decrease of 0.13%, and a year-on-year decrease of 3.53%; the models with a service life of 7-10 years accounted for 18.89%, a month-on-month decrease of 1.02%, and a year-on-year decrease of 2.22%; the models with a service life of more than 10 years accounted for 10.58%, a month-on-month decrease of 0.54%, and a year-on-year increase of 2.70%.

In May, the share of 3-6 years increased significantly compared with the previous month, while the other intervals decreased. Compared with the same period last year, the share of 3-6 years and more than 10 years increased overall.

Analysis of the situation in six major regions in May 2024

Second-hand car transactions in six major regions in May 2024

In May 2024, the six major regions in the country all experienced declines to varying degrees compared with the previous month, among which the declines in East China and Southwest China were the most obvious.

The second-hand car transaction volume in East China was 462,900 units, down 8.96% from the previous month, and the transaction volume decreased by 45,600 units from the previous month. From the perspective of specific provinces, the downward trend of the second-hand car market in Anhui and Jiangxi is still significant, with a month-on-month decline of more than 15%. Jiangsu, Zhejiang and Shanghai, as important economies in East China, also showed a more obvious downward trend this month. The second-hand car market in these three provinces has always been relatively active, but has recently been affected by a variety of factors, resulting in a decline in transaction volume. Shandong fell 8.8% month-on-month. Fujian's second-hand car market has performed well recently and continued to maintain its growth momentum this month, up 4.7% from the previous month.

The second-hand car transaction volume in the Central and Southern regions was 455,900 units, down 2.73% from the previous month and 12,800 units less than the previous month. Guangxi was the only province in the Central and Southern regions to see growth this month, up 5.6% from the previous month. The transaction volumes in the remaining provinces all declined to varying degrees. Among them, Hubei's decline was the most significant, down 8% from the previous month. The transaction volumes in Henan, Hunan, Guangdong, and Hainan showed a slight decline compared to April, with a decline of about 2% to 3%.

The second-hand car transaction volume in North China was 216,100 units, down 4.44% from the previous month and 10,000 units less than the previous month. The Beijing and Tianjin markets declined significantly this month, down 7.9% and 6.1% from the previous month respectively, and the market is still weak. The Hebei and Shanxi markets are still sluggish. Hebei's transaction volume this month fell by 3.6%, a narrower decline than last month. Shanxi fell slightly by 2.8%. The Inner Mongolia market rebounded slightly, up 3.6% from the previous month.

A total of 253,800 vehicles were traded in the southwest region this month, down 7.4% from the previous month and 20,300 vehicles less than last month. The transaction volume of each province in the southwest region this month has declined to varying degrees compared with last month. Among them, Yunnan, Tibet and Sichuan have seen the largest declines. Tibet and Sichuan have both seen a month-on-month decline of more than 9%, and Yunnan has seen a month-on-month decline of 8.5%. Chongqing has seen a slight decline of 4% from last month. Guizhou is the province with the smallest decline in the southwest region this month, down 2.4% from the previous month, and the market is relatively stable.

A total of 114,500 used cars were traded in Northeast China this month, down 2.41% from the previous month. The transaction volume decreased by 2,800 vehicles from the previous month. Among the three provinces in Northeast China, Liaoning's market showed a clear downward trend this month, with a 7.2% drop in transaction volume from the previous month. Heilongjiang also saw a slight decline of nearly 3%. Jilin's market has performed particularly well recently, and it has maintained an upward trend this month, with a month-on-month increase of 3.4%, a narrower increase than the previous month.

A total of 81,500 used cars were traded in the Northwest this month, down 3.39% from the previous month and 2,900 fewer than last month. Shaanxi, Gansu, Ningxia and Xinjiang all saw a slight decline this month, with a drop of about 2% to 5%. Compared with other provinces, Qinghai's market performance this month was relatively good. The overall market rebounded, up 3.4% from last month.

Cross-regional circulation in 2024

In May, the second-hand car transfer rate was 28.67%, down 0.3 percentage points from the previous month and up 1.9 percentage points from the same period last year. The total number of second-hand car transfers was 454,400, down 6.4% from the previous month and up 13.5% from the same period last year.