Author : Mark Nan Tu
Our company is an online used car market place for dealers and individual buyers alike. The used car market in China is set to explode in the next few years as the new car sell grow by 30% in 2007. There are more than 1000 new cars registered in Beijing every day which resulted in one of the worst traffic jam in the world.
The used car market in China is still in the very early stage. Most of the used car dealers are family owned small business men. About 80% of the used cars are sold by these dealers and the rest 20% are sold by 4s trade-ins and person to person trade. Unlike most of the developed countries such as the US and EU, Chinese used car dealers stay in the Used Car Malls where as many as 300 dealers rent parking and office spaces from the used car mall. The high contrentration of the cars in big cities such as Beijing, GuangZhou and Shanghai resulted in this unique phenomenon. The dealers pay a fixed rent for the used car mall. There is no printed ads for the dealers which may be an opportunity for online printed ads such as what our company offers.
The largest used car mall in Beijing is called HuaXiang automall. It is located in the southwest corner of the city and just inside the 4th ring road. The mall has around 300 used car dealers and on an average day, it has 3000 used cars on display. HuaXiang automall is partially owned by the government. The second largest used car mall in Beijing is the ZhongLian used car mall. It is located on the northwest of the city in SiJiQing exit of the 4th ring road. It has around 100 used car dealers and about 1000 used cars on display.
The competition of the used car dealers is stiff and with so many cars on display on the same lot, the price is very transparent. The average mark up for a used car is 7% meaning that the trading margin for a used car is 7%. The average turn over time is 1 month. The most popular brand for the used car market is Jetta. The most popular sells are those valued at around 50,000RMB or 7,000USD.
