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Expert: China Should Loose Control on Second-Hand Car Sales

The growth for China's car production and sales has slowed down for the past two months due to government's efforts to cool the economy. Last month, car sales grew only five percent, the slowest pace in two years. But experts say a big market has been neglected in the country-that is, the market for second-hand cars. And in this field, more clarified government policies are needed. Guan Juanjuan reports. 
Previously, the government policy only designated trading centers for automobiles to conduct the trade of second-hand cars. Sales companies for auto manufacturers were not allowed into the business.

Zhou Chang is a manager from a Beijing company which sells cars produced by Volkswagen's Shanghai venture.

Zhou Chang says all the second-hand cars they purchased from their customers have to be traded at the designated auto sales market. Zhou Chang notes if such a policy is loosened, they would conduct the trading of second-hand cars in their own company, which he believes, would be a big boost for their business.

China's newly-launched auto policy says the market control for second-hand cars will be loosened. But the detailed rules and regulations have not yet been worked out. Some auto experts have predicted that the prosperity of second-hand car trade will push up the sales of new cars.

Jia Xinguang is the chief analyst at the China National Automotive Industry Consulting and Development Corporation. He says in this specific field, China could learn from developed countries.

Jia Xinguang says in some developed countries, the sales volume of second-hand cars is almost three times of that of the new cars. But situation in China is different. The trade is only one-third of the sales business of new cars.

Jia Xinguang points out the prosperity of second-hand car trade will facilitate the expansion of several sectors, thus contributing to the overall development of the national economy.

(CRI July 27, 2004)

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