Beijing - The vast majority of cars in the world's biggest auto market are purchased new, but a second-hand trade is beginning to emerge in China despite traditional buyer reluctance -- and foreign manufacturers are hoping to benefit.
In China one used car is sold for every four new vehicles, the opposite of Europe and the United States, where around three used cars are sold to every new one.
Even though more than 23 million vehicles were sold in the country last year, more than 65 percent of car buyers in China are still purchasing for the first time and simply do not have one to trade in or sell in return.
At the same time there is a strong cultural preference for new items, rather than those tarnished by previous ownership, and without regulations, scepticism over the quality of used vehicles abounds.
But the car market is maturing and restrictions on new vehicle registrations are gradually changing attitudes.
"Only 10 years ago the mere idea of a used car simply did not exist for Chinese dealers," says Mathieu Vennin, a senior executive for French carmaker Peugeot in the country.
Last year, though, used car sales jumped 16.3 percent to 6.05 million vehicles, according to the China Automobile Dealers Association (CADA).
In contrast, sales of new vehicles only grew 6.9 percent, recording a marked slowdown.
"It's (used car sales) an area we want to work with our dealers," said Mark Fields, president and CEO of Ford Motors. "Especially now, as buyers of a first car are moving to their second vehicle, there are opportunities."
Almost all used car transactions are still made privately -- one expert said 95 percent are by small independent dealers, who trade as if they are private owners, without paying sales taxes. But big name manufacturers are looking to enter the market by reselling their own products second-hand, complete with quality guarantees.
"This helps build more credibility in the used car market that was nonexistent before," Lin Huaibin, an expert with IHS Automotive, told AFP.
Volvo Cars is the latest to set up such a scheme, following the leads of Nissan, Audi and Peugeot, which has 700 certification centres around the country.
AFP
