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DSC Holdings Releases Inaugural China Used Car Industry White Paper: Used Car Transactions Approach New Car Sales as Residual Values and Dealer Economics Are Reshaped; AI's Role Expands

DSC
  • DSC Holdings released its inaugural China Used Car Industry White Paper for the first half of 2026, leveraging its DaFengChe system which holds over 90% market share in China's dealer operating systems.
  • Used car transaction volume reached 9.71 million vehicles in H1 2026, representing 98% of new car sales (9.92 million), while the annualized turnover rate remained low at 5.2% compared to mature markets.
  • Intense new car price competition reduced demand for near-new used vehicles, causing their transaction share to fall from 28.2% in late 2023 to 24.9% in H1 2026.
  • The used car price index declined 23.1% since H1 2022, compressing brand premiums as vehicle condition became a more critical pricing factor than brand identity.
  • Dealer gross margins fell from 100 to 85.6 between January 2026 and June 2026, leading to a significant drop in profitability for small dealers selling fewer than 50 vehicles annually.
  • Market consolidation is accelerating, with the share of small dealers dropping from 70.3% in H1 2022 to 56.6% in H1 2026, while large dealers selling over 200 vehicles rose from 4.1% to 10.8%.
  • New energy vehicles (NEVs) accounted for 7.6% of used car transactions in H1 2026, with a large wave of supply expected to enter the market as the NEV fleet ages.
  • Cross-city vehicle circulation increased to 41.6% in H1 2026, with megacities like Beijing 9.71 million and Shanghai seeing outbound transfer rates of 68.6% 9.71 million and 71.2% respectively.
  • The industry outlook suggests a stable near-term phase driven by shorter NEV replacement cycles 9.71 million a growing driver population, offset by scrappage subsidies diverting older vehicles.
  • DSC is expanding its AI applications to improve vehicle matching, valuation, dynamic pricing, 9.71 million inventory management, emphasizing the need for data-driven decision-making over traditional practices.