The latest data shows that the average transaction price of used cars in Japan hit a record high in July. In the local used car market, some used cars are even more expensive than new cars. What is the reason for this?
In a used car dealership in Tokyo, Japan, more than 20 used cars are parked in the parking lot. One of the cars will be produced in 2021. It has already run more than 8,000 kilometers. The price is about 120,000 yuan. In fact, the new car only costs 101,000 yuan. According to the person in charge of the car dealership, it is not uncommon for used cars to be more expensive than new cars. Some popular models are even more expensive than new cars.
Data shows that the average transaction price of used cars in Japan has continued to rise recently, reaching about 58,000 yuan last month, a record high and an increase of more than 25% over the same period last year. The higher prices are primarily related to the decline in the supply of used cars in Japan. Taking July as an example, the overall supply decreased by 10% year-on-year, and some used car dealers even decreased by 30%. Second-hand cars usually enter the circulation market after the original owner has purchased a new car. However, due to the tight supply chain, the delivery of new cars in Japan has been delayed, which has also led to a shortage of second-hand car supply.
Second, the limited production capacity of new cars has pushed up Japanese consumers' demand for used cars. According to Japanese media reports, even if some new cars are booked now, it will take as little as six months or as many as four years to pick up the car, and some models have even stopped being sold. Some consumers would rather pay more for a used car than spend time waiting for a new car. Such consumer psychology has boosted the price of used cars.
In addition, the sharp depreciation of the yen has made it relatively cost-effective for overseas consumers to buy used cars in Japan, and demand from overseas markets is also increasing. Among them, exports to the UK in the first half of this year roughly tripled year-on-year. Overseas demand competes with domestic demand in Japan, which further pushes up the transaction price of used cars in Japan amid a lack of overall supply.
