China Retention Value Report: Japanese Brands are Big Winners; Retention Value Contributes to Sales Growth
GAC Honda, GAC Toyota, FAW Toyota, Dongfeng Honda and Beijing Benz Rank Top 5 in Retention Value
SHANGHAI: 15 April 2020 – The retention value plays the significant role in promoting in the saturated market. According to the J.D. Power China Vehicle Retention Value Report released recently, the new vehicle sales of the manufacturers ranking top 1-5 in terms of retention value all rose against the market downturn.
Creating authoritative retention value report with scientific model and massive data
The retention rates in China Vehicle Retention Value Report are based on J.D. Power’s mature retention rate model used for years in the United States and verified by domestic localized data, which covers the vehicle transaction data within the most recent year (March 2019 to February 2020) from 58che.com and Uxin.com, the leaders of classified information platforms and used vehicle trading platforms in China.
The report finds that due to the COVID-19, the sales volume in February fell nearly 80 percent year on year, and the volume of used vehicle transactions fell by more than 90 percent. At present, the OEMs have gradually returned to work. Digital marketing campaigns, such as VR experience, selling cars on livestream platforms, are launched by several OEMs as their fresh attempt. The used vehicle platforms also improve their services to support the trend change of users' online car viewing.
Post-90s are main users of used vehicles; 70% of transaction prices are within 100,000 RMB
The report demonstrates that post-90s group is the main force of used vehicle transaction, among which female users account for more than 70%. Besides, more than 70% transaction prices stay within 100,000 RMB, which are lower than listing prices overall. There is generally 10%-20% bargaining space for used vehicle transactions on the Internet platforms.
More than 70% of used vehicle transaction prices are within 100,000 RMB. Source: China Vehicle Retention Value Report (March 2020)
As for vehicle age, the three- to five- year-old used vehicles are the most popular with prices falling slowly and quality entering a stable stage. Among the three-year-old used vehicles, the average transaction prices of the vehicles with an average annual mileage of 30,000 km is the highest (117,500 RMB).
The used vehicles in their third to fifth years are the most popular. Source: China Vehicle Retention Value Report (March 2020)
High retention rate drives new-car sales
At the regional level, retention value increases progressively from west to east. Municipalities directly under the central government (Shanghai, Beijing, Tianjin and Chongqing) rank in the top four at the provincial level of retention rate. The retention value of imported cars is the highest (51.1%), mainly due to the scarcity of models, most of which are luxury brands with strong price premium. The value retention rate of domestic vehicles still has upside potential (44.3%). In 2019, nearly 70% of the manufacturers’ sales fell, whereas the new vehicle sales of the manufacturers ranking top 1-5 in retention rate all rose against the market downturn, which illustrates that the retention value contributes more to sales volume in the existing market.
The new vehicle sales of the manufacturers ranking top 1-5 in retention rate all rose against the market downturn. Source: China Vehicle Retention Value Report (March 2020)
Japanese brands are big winners; Domestic brands still have room for improvement
The report also gives a detailed analyzing of each of the 10 segments and ranks the top 10 models with the highest retention rates at each segment. The gaps among the top 10 compact cars in retention rate ranking are relatively small, and Japanese cars have obvious advantages, which occupying the top 8. Same story for compact SUV segment, the top 9 compact SUVs in the retention rate ranking are all Japanese models.
Among the top 10 luxury cars, imported cars have noticeable advantages, taking up 7 places. The top ones are brands with better service systems such as Toyota and Mercedes-Benz. Mercedes-Benz has 5 models on the list, which has the largest number of models on the list. In the MPV segment, domestic brands show certain competitiveness, and three models (Baojun 730, Refine M3 and Wuling Hongguang) are among the top 10.
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