Used Car Sales Hit 20 Million in 2025, but Profits Plummet to Record Low

In 2025, China’s used-car market reached a transaction volume of 20.108 million units, up 2.52% year-on-year, marking the ninth consecutive year of growth, with a total transaction value of RMB 1.29 trillion. However, industry profit margins have fallen to a historic low, averaging only around 4%, and some dealers are even experiencing losses, with purchase prices exceeding final sale prices. The surge in transaction volume has been driven by policy liberalization, high vehicle ownership (reaching 360 million units nationwide), shifting consumer attitudes, and the rise of new-energy used vehicles, which accounted for 1.6 million units in sales. Yet intensifying price wars in the new-car market, greater price transparency, and homogenized competition have squeezed profit margins, shattering the myth of high residual values. Some dealers have turned to overseas markets, but export competition is becoming increasingly fierce. Industry insiders widely expect the market in 2026 to continue its trend of “rising volume but thinning profits,” with survival hinging on improving inventory turnover efficiency, professionalized operations, and building a trustworthy industry ecosystem.