Core Insights - The second-hand car market in China is experiencing growth, with a total transaction volume of 1.87 million units in December 2025, reflecting a month-on-month increase of 7% but a year-on-year decrease of 1.5% [1][2] - The total transaction value for second-hand cars reached 120.7 billion yuan in December 2025, showing a year-on-year increase of 0.6% [1] - The cumulative transaction volume for second-hand cars in 2025 was 20.11 million units, up 2.5% year-on-year, with a total transaction value of 1.2898 trillion yuan, an increase of 0.4% [1] Market Trends - The proportion of second-hand car transfers has increased significantly, reaching a historical high of 34% in December 2025, compared to a range of 25-30% in recent years [1][21] - The second-hand market is characterized by a diverse range of vehicle types, with stable transaction prices, which is beneficial for the market [4] - The market is expected to see strong growth in 2026 due to the anticipated increase in vehicle replacement subsidies [5] New Energy Vehicles (NEVs) - The transaction volume of second-hand NEVs reached 169,000 units in December 2025, marking an 8.7% month-on-month increase and a 36.5% year-on-year increase, with a penetration rate of 12% [1][14] - Cumulatively, 1.61 million second-hand NEVs were sold in 2025, reflecting a year-on-year growth of 43% [1][15] - The market for second-hand NEVs is expected to grow significantly as the ownership of new energy vehicles increases, with a notable rise in the proportion of low-age second-hand vehicles [15][18] Vehicle Age Structure - The proportion of second-hand vehicles aged 3-6 years is 43.9%, while those over 10 years old account for 11.4% of transactions in 2025 [7] - The trend indicates an increase in the transaction of older vehicles, with the quality assurance of high-age products improving due to advancements in automotive technology [8][10] Pricing Trends - The average transaction price of second-hand vehicles is stabilizing, with a notable increase in the proportion of vehicles priced between 30,000 to 50,000 yuan, while those below 30,000 yuan are declining [13][19] - The recent increase in the transaction volume of second-hand NEVs priced between 50,000 to 80,000 yuan indicates a shift in consumer preferences [19][20] Inventory and Turnover - The inventory pressure for second-hand vehicles has improved, with 34% of vehicles having a turnover time of less than 15 days as of December 2025 [23] - The average inventory days for second-hand vehicles have decreased, indicating a more efficient market [23] Conclusion - The second-hand car market in China is on a growth trajectory, driven by increasing consumer demand, particularly for new energy vehicles, and improved market conditions for vehicle transfers and inventory management [1][5][15]

Core Insights - The Chinese used car market is projected to surpass 20 million transactions in 2025, marking a significant milestone with a year-on-year growth of 2.52% and a total transaction value of 1.28979 trillion yuan, setting a historical record [2][5] - This achievement reflects a profound transformation in consumer attitudes and the automotive consumption structure in China, shifting the focus from mere scale expansion to quality and efficiency [2][5] Market Trends - The used car market is experiencing enhanced inter-regional circulation, an increasing share of used new energy vehicles, stable average transaction prices across regions, and improved inventory management [5][6] - As of September 2025, the total number of vehicles in China reached 360 million, with the car ownership rate per hundred households increasing to 52.9, indicating a solid foundation for the used car market to achieve the 20 million transaction goal [6][13] Policy Impact - Recent policies, including the vehicle trade-in program, have provided stable supply for the used car market and optimized circulation processes, significantly contributing to the increase in transaction volumes [6][7] - Regulatory measures aimed at facilitating cross-province transactions and removing unreasonable restrictions have improved the operational landscape of the used car market [7][12] Historical Context - The used car transaction volume reached 10.39 million in 2016, with expectations for it to double by 2020. However, it took nine years to achieve the next milestone of 20 million transactions [11][12] - The market experienced fluctuations due to the global pandemic, with a notable decline in 2020, but rebounded strongly in 2021 with a 22.62% year-on-year growth [12][17] Current Challenges - Despite reaching the 20 million milestone, the growth rate of used car transactions has slowed compared to new car sales, with a mere 0.42% increase in used passenger car transactions in 2025 [17][18] - Factors such as consumer preference for new cars due to favorable policies and significant price fluctuations in the new car market have negatively impacted used car demand [18][21] Future Outlook - The used car market is expected to target 30 million transactions within the next five years, driven by stable pricing and the growth of new energy vehicles, which accounted for 7.9% of total transactions in 2025 [29][30] - The export market for used cars is anticipated to grow, with regulatory measures being implemented to ensure compliance and enhance the quality of exports [30][31] Industry Evolution - The used car industry is moving towards greater transparency, corporate structuring, and improved after-sales services, with a significant shift from individual operators to corporate entities [22][23] - The industry is expected to undergo further transformation, with a focus on standardization, professionalization, and the effective use of new media for marketing [32]

Overall Market Performance - In December 2025, the national used car market recorded a transaction volume of 1.8711 million units, representing a month-on-month increase of 7.15% but a year-on-year decrease of 1.53%. The total transaction value reached 120.672 billion yuan [1] - For the entire year of 2025, the cumulative transaction volume of used cars was 20.108 million units, showing a year-on-year growth of 2.52%, with an increase of 493,800 units compared to the previous year. The cumulative transaction value was 1,289.79 billion yuan [1] Market Trends - The used car market in 2025 saw a significant milestone, surpassing 20 million units in transactions, marking a historical high. This growth reflects strong resilience over the past decade [4] - The market exhibited a "low at the beginning and high at the end" trend, with a notable recovery in the second half of the year as new car prices stabilized and consumer confidence improved [4] Key Characteristics of the Market - The trend of cross-regional circulation of used cars continued to strengthen, with a registration transfer rate of 34.9% in December, up 4.7 percentage points year-on-year. This indicates a shift towards diversified and cross-regional consumer choices [5] - The proportion of used new energy vehicles increased, with 1.6 million units sold in 2025, accounting for 7.9% of total transactions, up 2.2 percentage points from the previous year [5] - The average transaction price of used cars stabilized at 64,500 yuan in December, reflecting a balanced supply-demand structure in the market [5] Inventory Management - The average inventory cycle for used cars was 45 days in December, remaining stable compared to November. Dealers have adopted refined management practices to enhance capital turnover efficiency [6] Vehicle Type Analysis - In December, the transaction volume for basic passenger cars was 1.0273 million units, with a month-on-month increase of 6.22% but a year-on-year decrease of 5.96%. SUVs and MPVs also showed varying trends, with MPVs experiencing a year-on-year increase of 5.67% [10] - For the entire year, the cumulative transaction volume of passenger cars was 15.7397 million units, with MPVs showing a notable growth of 7.36% year-on-year [11] Age of Vehicles - In December, vehicles aged 3-6 years accounted for the largest share of transactions at 42.97%, while vehicles under 3 years old saw a slight increase in transaction volume [14] Regional Performance - The Northeast region showed a remarkable performance in December with a transaction volume growth of nearly 10%. All six major regions experienced varying degrees of growth [15][16][17] - The East China region led with a transaction volume of 519,800 units, while the Central South region followed closely with 516,700 units, both showing strong month-on-month growth [15][16] Cross-Regional Circulation - The registration transfer rate for used cars reached 34.90% in December, with a total of 653,000 units transferred, marking a month-on-month increase of 10.39% [20]

Core Viewpoint - The second-hand car market in China is experiencing significant growth, with a projected transaction volume of 1.79 million units in September 2025, reflecting a month-on-month increase of 5.1% and a year-on-year increase of 8% [1][5]. Market Overview - The total transaction volume for second-hand cars from January to September 2025 reached 14.73 million units, a year-on-year increase of 3.6%, with a total transaction value of 946.2 billion yuan, up 0.7% year-on-year [1][5]. - The second-hand car market is still in a rapid growth phase compared to more mature markets in developed countries, indicating substantial future potential [1][5]. Industry Dynamics - The second-hand car market is benefiting from improved circulation and facilitation measures from local traffic management departments, which are enhancing the ease of transactions for consumers and businesses [1]. - The market is seeing a diversification in the types of vehicles traded, contributing to stable transaction prices [5]. Transaction Structure - In September 2025, the structure of second-hand car transactions shows that basic passenger cars accounted for 59.8%, SUVs for 14.1%, and MPVs for 7.5% [6]. - The market is shifting towards higher-end consumption, with a notable increase in the share of SUVs and MPVs [6]. Age Distribution of Vehicles - The proportion of second-hand cars aged 3 years or less reached 25.1% in September 2025, while those aged 3-6 years accounted for 41.1% [7]. - The trend indicates a growing presence of older vehicles in the market, with significant potential for future scrappage and renewal [8]. Price Trends - The average transaction price of second-hand cars is becoming more pragmatic, with an increasing share of vehicles priced between 30,000 to 50,000 yuan, while the share of vehicles priced below 30,000 yuan is declining [13]. - The transaction price structure for new energy second-hand cars is also evolving, with a notable increase in the share of vehicles priced between 50,000 to 80,000 yuan [18]. New Energy Vehicle Market - The transaction volume of second-hand new energy vehicles reached 15.91 million units in September 2025, marking a year-on-year increase of 58.3% [14]. - The penetration rate of second-hand new energy vehicles has risen from 3.6% at the end of 2022 to 11.8% by September 2025, indicating strong growth potential [14]. Vehicle Transfer and Inventory - The transfer rate of second-hand vehicles has increased, reaching 30.4% in the third quarter of 2025, reflecting improved convenience in vehicle transfers [20]. - The inventory pressure for second-hand cars is gradually improving, with a notable decrease in the proportion of vehicles held for over 30 days [23]. Resale Value - The three-year resale value for new energy vehicles is currently low but is expected to stabilize as the market matures [24][25]. - The depreciation of older new energy vehicles is being mitigated by the increasing value of battery components, suggesting a potential for better resale values in the future [25].