BEIJING (Reuters) - China commerce ministry has started allowing exports of second-hand cars, marking the country’s latest move to drive domestic sales and promote trade in the world’s biggest auto market.
The move comes after sales in China contracted last year for the first time since 1990s. Amid worries of a further decline, Beijing handed out tax cuts earlier this year to spur consumer spending.
In its latest bid to prop up the auto sector, the Ministry of Commerce said it had started allowing used-car exports from ten Chinese cities and provinces including Beijing, Shanghai and Guangdong, and that it would offer more support to the sector.
The ministry will start identifying companies that can handle such exports and has also called for the development of tests to ensure the quality and safety of second-hand car exports, it said in a statement on Monday.
It described the potential for used-car exports from China as “huge”, saying that in most developed countries exports account for roughly 10 percent of used-car sales.
Such exports can “stimulate the vitality of the domestic automobile consumption market, promote the healthy development of China’s automobile industry, and promote the steady improvement of foreign trade”, it said.
China’s second-hand car market is still far smaller than that for new cars. In 2018, sales of used cars in China hit 13.82 million, less than half of sales of new cars at 28.08 million, according to the commerce ministry.
Allowing second-hand car exports “should be positive for the entire automobile market in the medium to long term”, said Alan Kang, Shanghai-based analyst at LMC Automotive.
“If used cars sales are accelerated it will help smoothen sales of new cars,” he added.
Reporting by Yilei Sun and Brenda Goh; Editing by Himani Sarkar