Used car market heading for fast lane
- Source: Global Times
- [22:31 February 02 2010]
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Slow speed market
However, the booming used car market is still in low gear compared to the new car industry.
Only 4.1 million used vehicles were sold last year, compared with 15 million new ones.
The sales ratio between used vehicles and new vehicles in China is roughly 1/3:1, while the ratio in mature auto markets like the US and Europe range from 1:1 to 3.5:1, Shen Rong, deputy secretary general with China Automobile Dealers Association (CADA), told the Global Times.
Shen said a lack of reliable information about a vehicle's history, as well as consumer snobbery has slowed the development of China's used vehicle market.
Many Chinese equate social status with vehicles and think driving a used auto is "disgraceful," said Shen.
An unlicensed taxi driver and experienced used car buyer Yang Libao told the Global Times that "careful observation" and an auto mechanic to accompany a buyer are both indispensable for used car shoppers.
Yang called used vehicle markets "mixed up places" where sound vehicles with less than 1,000 kilometers and dangerous junkers are offered side-by-side..
A little help from friends
Yang spent only 8,500 yuan ($1,245) on his 2002 Geely, with the help of a friend from an auto repair and service shop. Though it is eight years old and has been driven 37,000 kilometers, it still runs pretty well, said Yang.
In China, like other countries, used cars can be purchased from individuals or from firms at used car markets.
Liu Changyun bought his 2004 Xiali A+ last summer through an auto service shop friend.
Low price and decent quality were the Beijing-based 29-year-old public relations officer's major concerns.
"I couldn't spend five hours every day in the subway to travel from the east side of the city to the north side," Liu told the Global Times.
Shenzhen-based Catherine Jiang, a 30-year-old magazine editor, bought a nearly new 2008 Dongfeng Nissan Qida, directly from a friend the same year after he had driven only for a short time. He'd decided he wanted to buy a different auto.
"The Qida was virtually brand-new and had only been driven less than 1,000 kilometers, so I bought it at a pretty low price – 130,000 yuan ($19,040)," Jiang told the Global Times.
And many used vehicle markets ask the used car firms to provide invoices and sign standard sales contracts, which must include the mileage and compensation terms if fraud is discovered.
But neither the used car companies will provide, nor ownership transfer offices ask sellers to provide reliable information about the vehicle including its technical conditions, maintenance records and accident records.
