On September 28th, according to data released by the China Automobile Dealers Association, 73.6% of used car dealers are operating at a loss, with high levels of used car inventory. The China Automobile Dealers Association published the “2025 China Automobile Distribution Industry Report for the First Half of the Year”, which revealed that although the volume of used car transactions increased in the first half of this year, the average price decreased significantly. The average transaction price dropped from 61,180 yuan in the same period of 2024 to 53,673 yuan, a 12.3% decrease, indicating a trend of increased volume and decreased prices in the used car market. However, while new energy vehicles accounted for 36.7% of China’s total car sales, they only represented 5.3% of the used car transactions, significantly lower than new car sales.
At the same time, there is increasing pressure from high levels of used car inventory. In June 2025, the average inventory holding period for used cars extended to 43 days, with 35.6% of businesses having an inventory period of over 30 days, highlighting the continued operational pressure faced by car dealers.
The report mentioned above indicates that the Chinese used car industry is facing multiple pressures, with a persistently high proportion of businesses experiencing losses and inventory congestion issues.
The report attributed the challenges in the used car market to the ongoing price wars in the new car market, which severely impact the operations of used car enterprises and lead to a decrease in retail purchases and lower customer satisfaction.
On September 28th, financial news outlet “First Finance” quoted industry expert Zhang Fan’s comment, stating that the continuous expansion of discounts on new cars and enhanced marketing promotion campaigns have diverted consumer attention away from the used car market. Furthermore, as the market becomes more transparent, dealers have less bargaining power. The report also mentioned that in 2025, the average profit per used car transaction is only around 1,500 yuan. Currently, mainstream used car platforms in the market have almost identical business models, lack differentiation in competitive strength, and can only rely on price wars to gain market share.
Apart from most used car dealers facing losses, new car dealers are also experiencing tough times. The report indicated that in the first half of 2025, the inventory alert index of automobile dealers continued to be higher than the critical level of 50%, indicating a poor overall business climate in the automobile market. Survey data showed that the proportion of car dealers suffering losses in the first half of this year increased to 52.6%. The new car sales business has experienced severe losses, resulting in significant financial pressure on dealers, with liquidity problems gradually spreading throughout the entire automobile distribution industry.