Prices Are Skyrocketing! Used Car Dealerships Are Struggling!

No one expected that the first to fall would be used car dealerships, given the price cut wave of new cars.

Used car dealerships are indeed struggling.

In the past, 2022 was already a tough year for used car dealerships. According to data from the China Automobile Dealers Association, in 2022, the cumulative transaction volume of the national used car market reached 1602.78 vehicles, with a year-on-year decrease of 8.86%, and a reduction of 155.7 million vehicles compared to the same period.

This year, data for February briefly recovered to the peak of September last year. Just as people thought consumption was recovering and spring would arrive, the new car market delivered a fatal blow.

As East Wind's Snow Iron C6 suddenly dropped by 90,000 yuan overnight, many fuel-powered car manufacturers joined the price war, even causing some car models' prices to become inverted. The used car market's "spring" did not come as expected, and the sudden cold snap caught these used car dealerships off guard.

The daily transaction volume of used cars has already seen a four-week decline.

It is said that the current used car market is one day, one price. I saw online that a used car dealer in Zhejiang Province said, "The store has a car that loses 260,000 yuan. It's not willing to 'cut meat' and will only lose more. One day, one price."

Former luxury cars were once the darlings of used car dealerships, but this year they have become a hot potato. A Lamborghini supercar that sold for over 370 million yuan in the first half of last year has dropped to around 280 million yuan this year.

A used car dealer complained, "It's even more exciting than trading stocks. I've been doing used cars for over 20 years and have never seen a market like this."

According to the Used Car Dealers Index, which has been below par since last year, it is clear that the used car market has been quite unprofitable in recent years.

Everyone believes that it will be hard to get through this year

Not only are these used car dealerships struggling, but also those online used car e-commerce platforms that once flashed on the screens of billboards have continued to fall.

For used car e-commerce platforms, the capital winter has arrived. In the past, they were crazy about burning money to subsidize and fight for attention, but that scene no longer exists.

According to statistics, among these 15 companies, many did not receive funding in 2015. The used car industry is a typical capital-intensive industry where money is worthless.

Because the price of used cars is high, selling one car can cost several hundred thousand yuan, and add in advertising and operational costs. In essence, most of them are selling at a loss. Without sufficient funds to cover these costs, it's impossible to operate.

The most galling thing is that since 2011, when Uxin was founded, the capital has poured hundreds of billions of yuan into this industry over the past decade, but without leaving a single winner behind.

After ten years of battling it out, all that remains are a few magical slogans from the heyday and the platform's impact on the used car industry is negligible.

This year, the used car market faces not only the shock of new car price cuts but also a fatal hidden danger: the impact of economic downturn.

Economic stagnation means many people can't even find work. Let me share some brutal data with you. Didi's users have dropped from 45 million to 1 million, and the number of ride-hailing passengers has decreased by 75%.

Last year, there were over 46,000 companies that went bankrupt nationwide.

However, you may not expect that the only data that has been rising over the past few years is what? Boss Zhaopin's monthly active users have broken through 100 million, with a growth rate of nearly 100%. This shows that more and more people are looking for work.

This period, all major media outlets have been advising graduating students to shed their "long robes" and accept reality, first taking care of themselves, as it is indeed very difficult to find employment.

Economic stagnation means the boss can't make money or even go bankrupt. As a result, people will sell their cars. The supply side increases, while demand decreases, making it harder to sell used cars in the future.

This year, every industry is struggling to move forward amidst difficulties. If you just sit back and do nothing, there will be no more opportunities.

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This article is first published on WeChat public account: Cherry's Little Finance. The opinions expressed in this article are those of the author and do not represent the position of Hexun.com. Investors should operate at their own risk.