The Thriving Used Car Leasing Market in China
2018-08-18 11:00 Saturday
In the wake of increasing vehicle ownership rates, China’s used car market has entered into a boom period, with a 7-fold increase in trade volume and 23.82% CAGR from 2008 to 2017. By the end of 2017, the number of used cars traded had exceeded 12.4 million, a 19.33% increase from the previous year.
According to a report from the China Automobile Dealers Association, the projected number of traded used cars in 2020 will exceed 20 million, indicating a promising future for China’s used car market.
The used car market has attracted a large number of potential consumers. The State Council canceled restrictions on used car ownership transfer in March 2018, creating a favorable market environment for the development of used car finance and leasing.
The latest research from Foresight Institute reveals that the value of China’s automotive leasing market exceeded 6 billion RMB in 2017. The lucrative nature of the industry has inspired many finance and leasing enterprises such as Herald Pacific Financial Leasing co, LTD., China Everbright Group, Pingan Leasing and Minsheng Financial Leasing, to enter the market.
Industry analysts have noted that the domestic new car market is now oversaturated, evidenced by years of flat, sub-5% growth. Therefore, traditional leasing enterprises should attach greater importance to the used car market and adjust their business layout accordingly.
The used car finance and leasing market has also drawn traditional financial institutions, e-commerce platforms, and internet auto platforms, all of which are attempting to seize market share by integrating leasing with their own products.