The wave of car price cuts has put the used car market in a difficult situation, and a wave of loss-making bankruptcies can occur at any time
After the Spring Festival, the entire auto market fell into a crazy price sale. From March 1 to March 2 alone, 14 manufacturers and 25 brands have announced reductions, some of which are direct cash subsidies, some are expansion funds, and some are trade-in subsidies.
According to the ** activities of various manufacturers, many manufacturers give discounts ranging from 3000-40000, and some manufacturers have discounts as high as 50000.
The manufacturer lowered the **, leaving the old car in a bind.
The price reduction of the new wave of models has made many people happy, because many people know that their cars can save tens of thousands.
However, when I see car companies cutting prices, the most uncomfortable thing is second-hand cars.
In the past two years, the second-hand car industry has not been very prosperous, many second-hand car stores are losing money, and some are still surviving, but they are also on the verge of bankruptcy.
As a new wave of price cuts is coming, this ** reduction is likely to crush old car manufacturers.
With the sharp decline in new cars, for consumers, the power of second-hand cars is getting smaller and smaller, because there is only a difference of tens of thousands of yuan, consumers can grit their teeth and buy a new car, and through loans, just the money saved after the price reduction can be repaid in full, which makes more and more people tend to buy new cars.
The most important point is that the price of new cars continues, and the sales of old cars will inevitably follow, in the field of old cars, the price of new cars will be reduced by three percent, then in the next 2-5 years, the price of old cars will be 50 60%, from this point it can be seen that the price reduction of old cars is usually 2 times that of new cars.
And most of the new car price reduction is around 10%, that is, the price of the new car is likely to drop by 20%.
It's easy to say if it's sold at a low price, but even if it's so, no one will buy it, because there are now many new cars that are priced at around 100,000 yuan, and the endurance and configuration are very high.
In the current car market, the ** of used cars is not much cheaper than new cars.
Old car dealers may go bankrupt.
In fact, in the past two years, the life of used car dealers has not been very good, and many have gone out of business due to lack of funds. Just like at the beginning of this year, there was news that a number of auto repair shops in Dongguan had closed down overnight, some people paid the money but couldn't drive the car, and some people were pulled away before they got the car.
Yongao's 80 4S stores have attracted much attention due to problems such as salary arrears, delivery delays, and vehicle license plates.
In fact, the situation of Dongguan automobile repair shop is only a small problem in the domestic second-hand car market, and over the years, the domestic second-hand car market has not been as good as imagined.
According to the statistics released by the China National Federation, from January to December 2022, the average inventory turnover days in the national second-hand car market are 37-51 working days; In the first half of 2022, the average number of days inventory turnover increased to 48-57 working days, while in the second half of 2023, inventory pressure will continue to increase to 59-61 working days.
After 2024, due to a wave of new car reductions, the sales of old cars will also decline, and the average inventory of old cars will also continue to rise, and the inventory of many 4S stores has exceeded 60 days.
According to the information released by the China Motor Vehicle Trading Society, since 2022, the domestic second-hand car market has shown a downward trend on average, starting from 7120 units, with sales of 5 by the end of 20229,900 units, although the average of used cars in 2023 will appear, it is still lower than the average in the first half of 2022.
In the early years, the profit margin of the second-hand car market was still above 8%, but in the past two years, due to the pressure of inventory, the profit margin of old cars has been raised, and the profit margin of some old cars will also drop to two percent.
In addition, used car dealers generally suffered losses due to a decline in gross profit due to an increase in inventory.
Statistics released by the China Federation of Automobile Manufacturers show that in recent years, about 92% of used car dealers are in a state of loss, that is, only about 8% of used car dealers are in a state of profit. In the face of constant losses, many businessmen could not bear such pressure and went out of business one after another.
According to incomplete data, in just three years, more than 5,000 car repair centers in the country have been closed. Although in 2022, due to the lifting of the epidemic, the second-hand car market has rebounded, and the average** and transaction volume have increased significantly, and in 2022, the country's second-hand car transaction volume has reached 1841330,000 units, 14 more than the same period last year88%。However, most of this is caused by trade-ins, and in fact, the profitability of used car manufacturers is still declining.
In 2024, due to the large price reduction of new cars, the profit margin of old car manufacturers will be smaller, and it can be expected that more 4S stores will fall into a loss-making situation in the future, and it is possible to go bankrupt and run away at any time.