Plummeting Resale Values of Gas-Powered Cars Shake Market as Luxury Used Car Prices Crash

On July 1, the domestic new energy vehicle (NEV) market penetration rate surpassed 60%, significantly shrinking the market share of internal combustion engine (ICE) vehicles. The price war in the new car market has spilled over into the used car sector, causing a sharp decline in prices for luxury ICE vehicles and visibly weakening the residual value structure of premium models. In May, multiple models from brands such as BMW, Audi, and Land Rover saw price cuts exceeding RMB 100,000. These lower new-car prices directly dragged down used-car valuations. That month, the average transaction price of used ICE vehicles fell by more than 8% year-on-year, while the three-year residual value of ordinary household ICE cars dropped to around 40%—a decline of over 25 percentage points compared to five years ago. Japanese sedans also experienced a parallel drop in residual values. High-end models like the Bentley Flying Spur, Porsche Cayenne, Mercedes-Benz G-Class, and Maybach saw their used-car transaction prices commonly reduced by hundreds of thousands of yuan. Some consumers have seized this opportunity to purchase luxury used cars at discounted prices, believing they now offer better value relative to new vehicles. The prolonged market downturn has severely impacted used-car dealers, with nearly half of industry personnel leaving the sector and many businesses shifting to other industries. Profit margins per vehicle have shrunk to just several hundred to RMB 2,000, prompting most dealers to adopt a rapid acquisition-and-sale model while strictly limiting inventory holding periods.