Page 146 - 2023 White Paper on the Business Environment in China
P. 146
3 White Paper on the Business Environment in China
increased business activity, the country's raft of its sales volume surging 19.2 percent month-
pro-consumption measures, among other factors, on-month. Approximately 1.42 million used cars
all contributed to the auto market expansion changed hands in May of that year, with a total
(Xinhua, China’s Passenger). transaction value of 95.94 billion RMB (about
14.21 billion U.S. dollars). The market logged
Smart functions, ranging from digital keys a much-improved performance in June as the
to gesture control, are becoming increasingly overall COVID-19 control situation improved and
important factors for car buyers in China. This restrictions on used car relocation were further
fact helps explain the surging popularity of local eased, the association said. Favorable tax policies
Chinese electric car startups, which are quicker for new car consumption also increased demand
to introduce new technologies into their models. for car replacement. In the first half of 2022, about
The intelligent vehicle-related field has been the 7.59 million second-hand cars were traded, down
most important battlefield for more and more 10.07 percent year on year. The total transaction
automakers. This also helps explain why such value topped 526.33 billion RMB in the period,
startup electric vehicle brands are often the first data shows. Noting that car replacement drives
choice among Chinese car buyers. Centering on demand in the auto market, the association said
user demand and user experience to undertake it is upbeat about used car consumption in July
research and development is critical, as well as on and expects the trading volume to continue to rise
user education, which is also very important for all (Xinhua, China Used).
automakers. Consumers' acceptance of advanced
technologies has improved, which prompts Authorities in July 2022 pledged to look at
carmakers to step up innovation and will promote measures to facilitate the trade and circulation of
transformation throughout the industry. Recent used cars. Overall car ownership levels are still low
car buyers are most satisfied with smart onboard in China versus developed markets like the US and
functions, like infotainment, but smart driving has Australia and the nation does not have a vibrant
yet to provide the same level of satisfaction for second-hand market place. Encouraging car sales
usefulness and effectiveness. Luxury brand owners in China’s vast rural areas was another area that
are most satisfied with phone-based digital keys could be examined. Vice Commerce Minister Sheng
while interior gesture control is one of the least Qiuping said car consumption may see “relatively
satisfying features in terms of functionality and fast” growth as policies bolstering the sector take
reliability. For volume brand owners, ground view effect. “These measures are very practical and
cameras received the highest satisfaction but facial target breaking down some institutional barriers
ID received low satisfaction because of functionality that restrain the development of the automotive
and privacy concerns. The assumption has been industry in the long run,” he said (Bloomberg News).
created that Chinese startups are making better
quality vehicles than established carmakers locally New Energy Vehicles
and internationally. In the increasingly complex
market environment, the China NEV market has China contributed nearly 50 percent of the global
achieved more rapid development than expected. growth in new energy vehicle (NEV) sales in 2021.
The high rate of growth is driven not only by the However, the market is still in its early stages, and
promotion of technological innovation but by the many trends and dynamics are still changing the
improvement in product quality. Automakers industry, including the choice of battery materials,
should create value for NEV owners with innovation the design of battery pack structures, changes in
and emphasize product quality (Li, Classic). the industry landscape, and policy shifts (Yang).
China's NEV market is expected to expand rapidly
Used Car Trade Market during the 2022-2026 period. The country's NEV
market size is forecast to reach 15.98 million units
Data from the China Automobile Dealers in 2026, with a compound annual growth rate of
Association shows China's second-hand car sector 35.1 percent during the period. The compound
registered strong expansion in June 2022, with annual growth rate for pure electric vehicles was
146
increased business activity, the country's raft of its sales volume surging 19.2 percent month-
pro-consumption measures, among other factors, on-month. Approximately 1.42 million used cars
all contributed to the auto market expansion changed hands in May of that year, with a total
(Xinhua, China’s Passenger). transaction value of 95.94 billion RMB (about
14.21 billion U.S. dollars). The market logged
Smart functions, ranging from digital keys a much-improved performance in June as the
to gesture control, are becoming increasingly overall COVID-19 control situation improved and
important factors for car buyers in China. This restrictions on used car relocation were further
fact helps explain the surging popularity of local eased, the association said. Favorable tax policies
Chinese electric car startups, which are quicker for new car consumption also increased demand
to introduce new technologies into their models. for car replacement. In the first half of 2022, about
The intelligent vehicle-related field has been the 7.59 million second-hand cars were traded, down
most important battlefield for more and more 10.07 percent year on year. The total transaction
automakers. This also helps explain why such value topped 526.33 billion RMB in the period,
startup electric vehicle brands are often the first data shows. Noting that car replacement drives
choice among Chinese car buyers. Centering on demand in the auto market, the association said
user demand and user experience to undertake it is upbeat about used car consumption in July
research and development is critical, as well as on and expects the trading volume to continue to rise
user education, which is also very important for all (Xinhua, China Used).
automakers. Consumers' acceptance of advanced
technologies has improved, which prompts Authorities in July 2022 pledged to look at
carmakers to step up innovation and will promote measures to facilitate the trade and circulation of
transformation throughout the industry. Recent used cars. Overall car ownership levels are still low
car buyers are most satisfied with smart onboard in China versus developed markets like the US and
functions, like infotainment, but smart driving has Australia and the nation does not have a vibrant
yet to provide the same level of satisfaction for second-hand market place. Encouraging car sales
usefulness and effectiveness. Luxury brand owners in China’s vast rural areas was another area that
are most satisfied with phone-based digital keys could be examined. Vice Commerce Minister Sheng
while interior gesture control is one of the least Qiuping said car consumption may see “relatively
satisfying features in terms of functionality and fast” growth as policies bolstering the sector take
reliability. For volume brand owners, ground view effect. “These measures are very practical and
cameras received the highest satisfaction but facial target breaking down some institutional barriers
ID received low satisfaction because of functionality that restrain the development of the automotive
and privacy concerns. The assumption has been industry in the long run,” he said (Bloomberg News).
created that Chinese startups are making better
quality vehicles than established carmakers locally New Energy Vehicles
and internationally. In the increasingly complex
market environment, the China NEV market has China contributed nearly 50 percent of the global
achieved more rapid development than expected. growth in new energy vehicle (NEV) sales in 2021.
The high rate of growth is driven not only by the However, the market is still in its early stages, and
promotion of technological innovation but by the many trends and dynamics are still changing the
improvement in product quality. Automakers industry, including the choice of battery materials,
should create value for NEV owners with innovation the design of battery pack structures, changes in
and emphasize product quality (Li, Classic). the industry landscape, and policy shifts (Yang).
China's NEV market is expected to expand rapidly
Used Car Trade Market during the 2022-2026 period. The country's NEV
market size is forecast to reach 15.98 million units
Data from the China Automobile Dealers in 2026, with a compound annual growth rate of
Association shows China's second-hand car sector 35.1 percent during the period. The compound
registered strong expansion in June 2022, with annual growth rate for pure electric vehicles was
146
