GM Opens Used-Car Business in China

October 28th, 2010

60-mile-long, 10-day traffic jam in China

General Motors has gone into a joint venture with its longtime partner SAIC Motor Corp., China’s largest automaker, to sell used cars.

The new company, Shanghai Chengxin, will open about 20 stores in Beijing and elsewhere in China to serve the world’s largest auto market.

According to one report, these facilities over the next five years will “acquire, repair and certify used cars for resale.” Along with Shanghai GM and other Chinese partners, the General expects to sell more than two million cars in China this year. (Last year, they sold a record 1.83 million.)

Old Shanghai cars

Selling used cars in old Shanghai

Most folks in the U.S. have no idea how this market has grown. SAIC’s revenues this year have more than doubled to 81.86 billion yuan ($12.24 billion U.S.). Third-quarter profit was up 47 percent. This surge has been in part driven by government policies to boost the domestic car industry:

China launched its old-for-new car program last June as part of its efforts to stimulate domestic consumption amid the global downturn and to eliminate oil-guzzling vehicles. [Sound familiar?]

Further, in early June the government rolled out new incentives for purchases of fuel-efficient cars, including a subsidy of 60,000 yuan for purchasing all-electric vehicles and a 3,000-yuan subsidy for certain fuel-efficient cars equipped with 1.6-liter, or smaller, engines.

Which translates, of course, into plenty of used, less-efficient cars available. One aim of the new joint venture will be to set and adopt “unified nationwide standards for the sale and service of used cars,” according to the president and managing director of GM’s China Group.

Maybe that means the used-car business in China will be less chancy for buyers, at least down the road, than it is here—but don’t bet on it. We can imagine that they will have a difficult time finding best bargains and good deals. After all, they don’t have DealFinder to search out the best cars at the best local prices.

Do you think more U.S. auto companies will be getting into the used-car business?

—jgoods

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  1. | #1

    Toyota did this in NZ they began importing their own used JDM cars giving them a once over in their old assembly plant and calling them signature class with a warranty etc they gave some certainty amongst a flood of sometimes dodgy used Jap cars.

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