Auction of second-hand autos has huge market potential

• Source: Ce.cn
• [13:44 September 23 2009]
• Comments

In such an industrial chain, auction plays a key role in connection. "The auction transaction platform makes a mass of second-hand auto resource realize re-allocation efficiently, and makes the circulation of second-hand autos more smooth." And a smooth second-hand auto market can derive numerous relative industries and create considerable profit benefiting multiple parties.

As introduced by Zhou Hang, in the US, the nationwide auction net of Manheim Auctions Inc. has driven the rising and development of such businesses as evaluation, testing, reorganization and outfit, logistics, financing and information consulting of a large number of second-hand autos.

The auction market's potential is promising

Statistics released by China Automobile Dealers Association shows that in the first half of this year, the transaction volume of the second-hand autos in 31 provinces, autonomous regions and cities reached 1.502 million sets, up 23.93 percent year on year.

The scale of China's second-hand market is expanding, but the transaction volume of the second-hand autos transacted in the manner of auction still seems too trivial.

With over a decade of cultivation, the auction of second-hand autos is being recognized by more and more people. "Initially, the auction of second-hand autos is only in the bud, far from shaping an industry, but now it is developing towards a relatively large industry." Li Bo expressed.

However, compared with mature markets, the second-hand auto auction in China's auto market can only be considered in the primary run-in phase.

Presently, aiming at the traits of current second-hand auto market, the auction companies like Beijing Zhonggu Auction Co., Ltd have conducted mass B2C businesses.
However, Manheim Auctions Inc. still insists on B2B-lead auction mode after launching into Chinese market. Since this year, Beijing Manheim BAI Motor Vehicle Auction Company Limited has held 48 auctions with the transaction valued RMB41 million yuan, which only takes a very small proportion in Manheim's global businesses.

Zhou Hang said frankly that the current development of China's second-hand auto market has determined that the functions and advantages of B2B auction has not yet been fully exerted, "What we are doing is to introduce Manheim's mature auction concept and mode, and we hope our effort can accelerate the development of the overall second-hand auto market."

Learning about the experience of mature markets, if the second-hand auto auction wants to truly grow up, the abundant second-hand auto resource in the upstream is indispensable.

Over the past years' development, in China's auto market, the auto population has aggregated to a certain extent. The year of 2002 and 2003 are a peak in auto purchase, over the several years' usage, these autos will enter into the second-hand auto market gradually, which makes auction companies see a hope.

Nevertheless, Li Bo also expressed that currently, the competition on auto source is quite fierce, the regular method for bargainers to dispose their second-hand autos is to sell them to auto brokers, "Lots of bargainers are unfamiliar with the auction, so what we need to do is to let more people know and choose the auction to dispose their second-hand autos."