The main markets for China’s used car exports are centered on the “Belt and Road” countries and emerging economies, with Central Asia, the Middle East, Africa, Southeast Asia and South America as the core.
(Top 10 countries and territories exporting used cars, 2024)
Central Asia and Eastern Europe: traditional anchor markets
Central Asian countries have long topped China’s used car exports by virtue of their geographic proximity and policy facilitation. in 2023, Kyrgyzstan, Russia, Uzbekistan and Kazakhstan rounded out the top four in terms of export volume, together accounting for more than 60%.
The core needs of these markets include: Price-sensitive consumption: GDP per capita is low in Central Asia, and Chinese used cars (especially Japanese and Korean fuel cars) are highly competitive with a price range of RMB 30,000-50,000.
For example, a 2018 Haval H6, which sells for about 60,000 yuan in China, can be sold at a premium of about half in Kyrgyzstan. New energy transition: countries such as Russia and Kazakhstan are promoting the popularization of new energy vehicles, and China’s new energy used car exports to the region reached 138,000 units in 2023, accounting for 50.3% of overall exports.
Used EVs of BYD and Azure brands are rapidly penetrating the market through the “China preparation + local distribution” model. Policy dividend: Central Asian countries’ import tariffs on used cars range from 0% to 15%, and cross-border logistics channels such as the Sino-Japanese-Ukrainian Railway significantly reduce transportation costs.
The Middle East: a hub for entrepot trade
The Middle East market is centered on the UAE, which will overtake Kyrgyzstan to become the largest export destination for Chinese used cars in 2024. The region’s unique advantages include: Re-export network: Dubai Port, as the world’s largest automotive re-export center, where Chinese used cars can radiate to the African, East African, and South Asian markets after completing GCC certification.
For example, a used SUV cleared in the UAE and distributed to Kenya through a local dealer can end up selling for up to twice the Chinese export price.
High-end demand: Saudi Arabia, Kuwait and other countries have a strong demand for medium- and high-end fuel vehicles, and the 3-5 year-old models of Mercedes-Benz, BMW and other brands are rapidly turned over through the “overseas warehouse + local retail” model.
Testing the waters with new energy: The UAE, a leader in the Middle East, has launched a new National Electric Vehicle Policy (NEV) with the goal of increasing the share of electric vehicles on the road to 50% by 2050.These measures have greatly contributed to the popularity of new energy vehicles in the UAE market.
Testing the waters with new energy: The UAE, a leader in the Middle East, has launched a new National Electric Vehicle Policy (NEV) with the goal of increasing the share of electric vehicles on the road to 50% by 2050.These measures have greatly contributed to the popularity of new energy vehicles in the UAE market.
Africa: the fastest growing blue ocean market
The African market has been growing rapidly in recent years, with key features including: policy relaxation: Ethiopia will completely ban fuel vehicle imports in 2024 and only allow new energy used vehicles to enter the country; Nigeria has set a limit on used vehicles older than 12 years but gives tax incentives to new energy vehicles.
The African market has been growing rapidly in recent years, with key features including: policy relaxation: Ethiopia will completely ban fuel vehicle imports in 2024 and only allow new energy used vehicles to enter the country; Nigeria has set a limit on used vehicles older than 12 years but gives tax incentives to new energy vehicles.
South America: new policy-driven opportunities
Argentina and other South American countries unleash market potential through tariff adjustments: Tariff dividend: starting from 2025, Argentina exempts tariffs on EVs with FOB price ≤ $16,000 and opens up a quota of 50,000 units per year; eliminates the 20% excise tax on $40,000-$73,000 fuel vehicles.
Key market strategies and trends
Vehicle adaptation: Accurate product selection for different market demands, such as exporting luxury fuel vehicles to the Middle East, promoting economical fuel vehicles to Africa, and launching new energy commercial vehicles to Southeast Asia.
Mode innovation: Adopting “overseas warehouse + localized service” to improve the turnover efficiency, such as setting up repair centers in the United Arab Emirates and Kenya, providing N-year warranty service, and improving the repurchase rate of customers.
In the future, with the full liberalization of China’s used car export policy (nationwide pilot from March 2024) and the improvement of infrastructure along the “Belt and Road”, the dominant position of the Central Asia, Middle East and Africa markets will be further consolidated, while the emerging demand in South America and Southeast Asia is expected to become a new growth pole.
Enterprises need to focus on target country certification requirements (e.g., EU WVTA, Africa COC) and environmental standards (e.g., Saudi Arabia GSO), and expand B2C channels through cross-border e-commerce platforms (e.g., Alibaba International) in order to cope with the increasingly fierce market competition. The above data is compiled from the Internet, and is subject to the actual situation.
Article source: used car chubby talk
