Central Asian Demand is Driving a Surge in China's Exports of Used Cars

China's used car exports are expanding quickly, and one of its main markets is Central Asia. Earlier this week, Shanghai-based Chinese state media Yicai Global reported that the Khorgos Gateway, the largest dry port in the world that connects Kazakhstan and northwest China, has developed into a significant export hub.

According to Fu Lei, deputy director of the Port Administration Bureau of the Khorgos Economic Development Zone, the port assisted in the export of 400,300 vehicles last year, of which 60% were commercial vehicles.

Over 400,000 commercial vehicles were exported from the port overall, including shipments via railroads, which is more than 100,000 more than the previous year. It was noted in the report that most of these were used cars.

Originally concentrating on engineering parts and general merchandise, the port has witnessed an increase in used car exports, particularly since 2022 when Chinese automakers started aiming for Central Asian markets like Uzbekistan. Taking advantage of Khorgos' advantageous location and rising demand in the area, foreign companies, domestic automakers, and international traders have swarmed to the city.

What is driving the demand for used cars being exported?

Improvements in governmental regulations and policies are responsible for the rise in exports of used cars. Authorities have expedited procedures such as vehicle transfer registration and licensing applications since the implementation of second-hand car export programs nationwide in March 2023. Additionally, local governments have implemented policies to assist companies and increase their competitiveness internationally.

Even with this expansion, there is still a lot of unrealized potential in China's used car export market. In contrast, South Korea and the United States exported 500,000 and 900,000 used cars, respectively, last year, while Japan exported more than a million.

By encouraging sustainable innovation and offering top-notch goods and services to buyers abroad, the Chinese commerce ministry hopes to further increase exports of used cars. It is anticipated that this will improve the flow of used cars both domestically and abroad.

China's largest exporters of used automobiles

The largest used car exporter in China, Global-Ucar Technology, based in Guangzhou, reported a 67% increase in vehicle exports in the previous year. Its shipments of used cars increased more than threefold, breaking previous records. Chairman Gan Honglin credited the company's aggressive foreign expansion strategy for this growth.

Targeting East Africa, West Asia, and Central Asia, Global-Ucar opened branches in nations like Djibouti, the United Arab Emirates, and Uzbekistan between 2021 and 2024. In order to work with regional service providers and meet the needs of the local market, it also opened showrooms in Ethiopia and the United Arab Emirates.

The country's export market for used cars is expected to grow steadily as Chinese companies continue to grow internationally and gain from policy improvements, boosting both domestic and foreign trade.