News from China’s biggest used-autos conference

08 Jul 2017

The 2017 CUCA (short for China Used Auto Conference, or in Mandarin, 2017 CUCA中国二手车大会), organized by the China Automobile Dealers Association (CADA), came to a close yesterday. The three-day conference is quickly shifting from an industry backwater to a centerpiece, given that China now has 200 million used autos in circulation, and CADA itself estimates the number of used autos to surpass the number of new autos by 2020. 

Here is some of the most notable news to come out of the three-day event.

Used-auto market flourished in first 5 months

Speaking at the event, CADA president Shen Jinjun said 4.8 million used autos were traded in the first five months to May 2017, a year-over-year increase of 21 percent. The growth rate of used-auto trade is now higher than that of new autos.

This is only expected to grow, with the nationwide repeal of a law restricting the movement of used autos between provinces. The law is expected to be repealed soon. More than 13 provinces and 135 cities have issued requests to the central government requesting the law to be repealed.

This growth has been reflected in some extremely big funding rounds for used-auto platforms in 2017. More than 10 billion RMB ($1.47 billion U.S.) has been poured into used-auto e-commerce in just the past six months.

The year kicked off with the biggest of these, when Warburg Pincus-backed auction site Uxin (优信二手车) secured $500 million U.S. from TPG Capital, Jeneration Capital (时代资本) and China Vision Capital (新华资本).

This was followed by Guazi ershouche (瓜子二手车) announcing its own $400-million U.S. funding round last month (we reported here). The round was led by H Capital, CMB International, Dragoneer Investment Group, and existing investors Matrix Partners China (经纬中国) and BlueRun Ventures. 

Chezhibao wins brand-recognition award 

The biggest award went to fast-rising c-to-b auction platform Chezhibao (车置宝), which was named “most influential brand” for 2016/17.

The award is an interesting one insofar as Jiangsu-based Chezhibao is known more for securing funding than developing brand recognition, having secured a total of $222 million U.S. in funding, according to Crunchbase.

In June, Chezhibao completed a 500 million RMB ($73 million U.S.) series C+ investment round led by Shenzhen-based venture firm Youjin Capital (酉金资本) and the Jiangsu One Belt One Road Investment Fund (江苏“一带一路”投资基金). This followed on the back of a series C round, completed in March. Worth $100 million U.S., the round was led by investment management firm PAG (we reported here).

According to the Chezhibao website, the company has subsidiaries in 22 Chinese cities, with plans to expand to 100 cities by 2019.

Gongpingjia.com and UCAR to co-launch financing platform

China’s leading third-party auto-price estimation platform Gongpingjia.com (公平价) and UCAR announced that they will launch an auto-finance platform at Carbank.cn (神州车闪贷).

UCAR (神州优车集团) is China’s principal, domestic competitor to ride-hailing giant Didi Chuxing (滴滴出行), which acquired embattled UBER China in August 2016. It also operates the new auto-buying and dealer-bidding platform Maimaiche.com (神州买买车).

Having secured 4.6 billion RMB ($670 million U.S.) in new funds from four investors, including UnionPay in March, UCAR is quickly diversifying.

As with Chezhibao’s recent announcement that it will dip its toes into financing, Gongpingjia and UCAR must be eyeing the massive, untapped market for auto financing in China, and the possibility of turning auto loans into fast cash.

The value of asset-backed securities (ABSs) issued in China has doubled for two straight years, since they were allowed to be issued in 2015, and companies such as Yixin Group, and more recently Guazi, have turned a burgeoning auto-loan market into fast cash (by bundling the loans, and using them to back securities issued on the capital market, in the same way home loans were bundled and sold to banks and pension funds around the world in the previous decade – editor).   

In fact, UCAR is no stranger to these kinds of deals. Just last October it raised 10 billion RMB ($1.45 billion U.S.) with a private-placement plan.

 Chevip.com wins price-estimation contest

The first day of the event was dedicated to the national finals of the Jingzhengu.com Price Estimation Cup, a nationwide competition for intelligent, price-estimation software systems, organized by price-estimation platform Jingzhengu.com (精真估).

In the competition’s regional rounds, no less than 201 teams from various sectors submitted their work. 

The winner of the competition was Guangdong-based Chevip.com (唯普汽车). Founded in 2005, Chevip.com is both a car-owner services platform (with a price-estimation function), a car-service provider for corporations and the local government in Guangdong, and a used-auto auction site covering Guangdong. 

Shanghai-based ChinaGrandAuto.com came in second.  

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Tom Marling

Tom is a PhD candidate in Chinese History at Hong Kong Baptist University, and former PR consultant in Mainland China. He joined the AIM Group in 2016 as a writer/analyst.