China's Chongqing exports second-hand cars, offering more options for global customers

In early July, a batch of BYD cars worth 1.21 million yuan (USD 170,000) cleared customs in the Wanzhou Comprehensive Bonded Zone, Chonqqing, China, and headed for Nigeria. Remarkably, all these vehicles were second-hand. China began exporting second-hand cars in May 2019 and now is a significant player in this market, with Chongqing emerging as a key contributor.

A China-Europe freight train departs from the Tuanjiecun Station of Chongqing International Logistics Hub Park in Shapingba District of Chongqing, southwest China, July 30, 2024. (Photo/Huang Wei, Xinhua)

Challenges and strategic shift

Chongqing's initial attempts at second-hand car exports faced difficulties. In 2020, five local automotive giants, including Changan, were selected as pilot companies, but they managed to export only about 70 cars in over ten months. The problem stemmed from the nature of second-hand cars, which include genuinely used vehicles and nearly new, but registered cars. Major manufacturers found it inefficient to handle genuinely used cars and unnecessary to export nearly new ones as second-hand.

To address this, Chongqing shifted its focus to trading companies. Five trading companies were chosen in the second batch of pilot enterprises, resulting in a rapid increase in exports to over 700 cars in just three months. Chongqing Zeta Supply Chain Management Co., Ltd., one of these companies, moved its operations from Chengdu to Chongqing and saw significant success in its first year.

Targeting mid-to-high-end markets

Chongqing's second-hand car exports have risen steadily, now ranking around 10th nationwide. Despite starting later and lacking port facilities, Chongqing, an inland city, exported over 8,000 units last year. Notably, the average price per exported car ranks third nationwide due to a focus on mid-to-high-end markets.

Zhong Hua, General Manager of Chongqing Zeta Supply Chain Management Co., Ltd., explained that Chongqing's late entry pushed it to target more valuable segments as low-price markets were already occupied. Zhang Xiaoli, General Manager of Chongqing All Happy Families International Trade Co., Ltd., expanded his business to Dubai, selling mid-to-high-end new energy vehicles like BYD's high-end models. These vehicles are highly sought after internationally but not always available in every country.

Sharing opportunities

In February, all cities were aurthorized to export second-hand cars. Chongqing responded by increasing the number of qualified exporting companies. Ninety-five enterprises have applied for export qualifications, with 76 approved so far this year. In the first half of 2024, Chongqing exported 3,743 second-hand cars, a 44.18% year-on-year increase, with a total value of 97.17 million U.S. dollars. Major export markets include Uzbekistan, Kyrgyzstan, Azerbaijan, Belarus, and Kazakhstan.

Chen Yongqin, head of Chongqing Dudu New Energy Automobile Co., Ltd., said that most exported second-hand cars are registered as "new" cars. His company plans to focus on markets in the Middle East and Africa, aiming to export 1,000 second-hand cars this year. Zhang Xiaoli also sees potential in used cars for markets like Russia and plans to expand into genuinely used vehicles.

Second-hand car exports are becoming a key growth area for Chongqing's foreign trade, expanding the global footprint of local automotive brands. In the first half of 2024, Chongqing exported over 220,000 cars, indicating strong demand for "Made in Chongqing" vehicles. Second-hand car exports help fill gaps in global markets not reached by new car sales, enhancing Chongqing's automotive presence.

Industry experts suggest that as more enterprises enter the market, Chongqing should focus on regulation to prevent destructive price competition and promote healthy growth, ensuring the market expands sustainably.

According to data from the Chongqing Municipal Commission of Commerce, by the end of June this year, Chongqing had exported 12,796 second-hand cars, totaling 360 million U.S. dollars and reaching 42 countries and regions worldwide.

(Yang Jun, Ren Meilian, Chinese reporters from Chongqing Daily, and Huang Lingjing, an intern, also contributed to this article.)