Opinions on Promoting Used cars¡¯ Transaction

At present, the number of retained motor vehicles in China has reached 194,000,000, and the used car market is of huge potential. The Report of Government Work in 2016 proposed to invigorate the second-hand car market. In order to thrive the used car market, to pull up new car consumption, and to drive auto parts, maintenance and repair as well as insurance development, the State Council issued the Opinions on Promoting Used cars Transaction , in which the most important measure is to cancel restrictions on the ingoing of used car.

The basic premise to invigorate the used car market is to make free flow of used cars. To cancel restrictions on the ingoing of used car is to make used car flow freely according to market laws so that sonsumers could buy or sell the car at will and satisfy the diversified and multi-layered consumption needs. It could help transform the huge potential of the used car market into great kinetic energy of used car circulation, fully unleash the potential of used car market, drive new car sales and stimulate maintenance and insurance development.

After the Opinions was released, departments at various levels have genuinely implemented and actively promoted to cancel the restriction policy. Most regions have adjusted relevant policies and some provinces required to completely cancel restrictions on the ingoing of used car. The effects of policy have began to take on. According to the statistics by transport management departments, 16,020,000 vehicles were registered to change their owner in 2016, up 19% year on year.

Meanwhile, since there were different understandings about the policy of cancelling restrictions on the ingoing of cars, we also find problems of performing with different standards and imperfect execution. In order to promote the implementation of policy, the Ministry of Environment Protection and the Ministry of Commerce jointly circulated a notice recently, requiring that except for vehicles that were required to eliminate, all regions except Beijing-Tianjin-Hebei province, Yangtze River Delta and Pearl River Delta shall completely cancel the policy of restricting the ingoing of used cars in line with the Opinions. It is predicted that cars that were allowed to hit on the road shall be allowed to move in except the yellow label car. As the policy is implemented gradually, we can predict that the used car market will become more active.