China's Ministry of Commerce (MOFCOM) has started allowing exports of secondhand cars, marking the country's latest move to drive domestic sales and promote trade in the world's biggest auto market.
The move comes after vehicle sales in China contracted last year for the first time since the 1990s. Amid worries of a further decline, the Chinese government enacted tax cuts earlier this year to spur consumer spending.
In its latest bid to prop up the auto sector, MOFCOM said it had started allowing used-car exports from 10 cities and provinces including Beijing, Shanghai and South China's Guangdong Province, and it would offer more support to the sector.
The ministry will start identifying companies that can handle the exports and has also called for the development of tests to ensure the quality and safety of secondhand car exports, it said in a statement on Monday.
It described the potential for used-car exports from China as "huge", saying that in most developed countries, exports account for roughly 10 percent of used-car sales.
Such exports can "stimulate the vitality of the domestic automobile consumption market, promote the healthy development of China's automobile industry, and promote the steady improvement of foreign trade," it said.
China's secondhand car market is still far smaller than that for new cars. In 2018, sales of used cars in China hit 13.82 million, less than half of sales of new cars at 28.08 million, according to the MOFCOM.
Allowing secondhand car exports "should be positive for the entire automobile market in the medium to long term," said Alan Kang, Shanghai-based analyst at LMC Automotive.
"If used car sales are accelerated, it will help smooth sales of new cars," he noted.
