Reasons Used Car Dealers Are Reluctant to Stock Chinese Brands

KatadataOTO – Chinese cars are starting to record a positive sales trend in Indonesia, especially in the electrification line, both pure electric and hybrid cars.

However, there is still one concern among consumers, which is the resale value.

The prices of new Chinese cars are currently varied and increasingly competitive. As time goes on, manufacturers continue to compete to introduce new products but at lower prices.

On one hand, this benefits consumers because they spend less money.

Photo : OLX

Amid economic uncertainty and the declining purchasing power of the middle class, this is certainly a breath of fresh air.

However, according to sellers of (used cars) used cars, this makes second-hand units from China difficult to resell at competitive prices.

“I don't dare to stock Chinese cars because their price depreciation is severe,” said Andi, owner of the Jordy Mobil showroom at MGK Kemayoran, when contacted by KatadataOTO recently.

Even though the age of the vehicles sold varies. But not all brands can be re-offered at a high price.

Various factors are the cause. For example, potential consumers' fears about the availability of spare parts and the uneven distribution of dealers compared to Japanese brands.

“Dealers (of used cars) buy (units from China) for under Rp 200 million. The drop can be 30 percent to 40 percent,” revealed Andi.

Japanese-made cars still seem to be the favorite in the used car market. This is because their official dealer network is more extensive, so consumers don't have to worry about periodic servicing.

Andi believes that ultimately, the phenomenon of Chinese manufacturers launching cars at low prices will impact the unit's price when it is resold.

“The price of used (Chinese cars) will definitely be affected,” Andi emphasized.

Even with low prices, Andi revealed that used car sales are currently experiencing a decline due to uncertain economic conditions.

Photo : KatadataOTO

“Because of the current situation, mostly only those who really need a car are buying one,” Andi said, concluding his statement.

On the other hand, Chinese manufacturers like Chery have implemented a resale value guarantee program to ensure the price of their second-hand units when they are to be resold.

This is expected to help convince consumers to buy Chery's vehicle lineup.