A Chinese company in Guangzhou recently exported 300 used cars to buyers in Cambodia, Nigeria, Myanmar and Russia. The shipment was a first for China, which till now had restricted large-scale exports of used cars in deference to manufacturers, who feared that poor vehicle quality could damage their reputations. There will be more such shipments -- and their impact will reverberate well beyond the mainland’s used-car lots.
With all the focus on electric and self-driving cars, it’s easy to overlook just how big and influential the market for old-fashioned junkers remains. In developed economies, more than twice as many used cars are sold as new ones. For example, there were 17.3 million new vehicles sold in the U.S. during 2018 -- and 40.2 million used ones. The gap is forecast to widen in 2019, driven by the ever-escalating price of new cars and a flood of used vehicles coming off lease. Automakers may be forced to slash prices of new vehicles and eliminate incentives in order to prop up sales.