From four parking spots in Licun Market to a 200-car luxury showroom, Baochi Used Cars Chairman Liu Qingsong took 28 years. In the past month, the 28 years of industry experience and pricing system have been completely rewritten.
In May 2026, China's auto market reached a historic turning point: for the first time, new energy vehicles occupied all top 10 passenger car sales positions, with new energy retail penetration reaching 62.9%, a record high. Fuel vehicle retail sales fell 39% year-on-year, their market share dropping to 37.1%, and the luxury brand-led fuel vehicle market also experienced a price reduction wave.
The shockwave quickly spread to the used car sector. A Bentley for 268,000 yuan, a Porsche for 150,000 yuan, a Volkswagen Touareg for 68,000 yuan... let alone the rapidly depreciating "near-new" new energy vehicles. Is this a golden age for "bargain hunting" or a "coast" full of hidden reefs? Recently, reporters visited several used car trading markets in Qingdao and interviewed veteran dealers with nearly 30 years of experience to see the real ecology under this industry upheaval...
Impact of Luxury Car Price Plunge: One Month Equals a Year of Depreciation
On the afternoon of June 24, in the Baochi Auto Mall on Jiushui East Road during a working day, the negotiation area was almost full of customers, while a live-streaming team nearby was introducing different brand car conditions.
"Starting from the earliest Licun Market to the Luhai used car trading market, renting a small storefront for 20,000 yuan with four parking spots," Liu Qingsong recalled. He built Shandong Province's first used car showroom in Luhai and witnessed the entire journey from rough-and-tumble growth to large-scale operations. Over 28 years, he experienced a complete reversal from a seller's market to a buyer's market.
"It used to be a seller's market, with cars hard to find and few private cars. If you had a car, you could sell it for money; anyone who did it made money. Now the market is saturated, supply exceeds demand, and it has entered a mature stage of standardization, scaling, branding, and specialization," Liu said. The past "mom-and-pop shops" and "individual operators" are being replaced by large used car complexes.
The cars he sold also witnessed industry changes: "The earliest were the old three — Fukang, Santana, Jetta. Then came Japanese, German, French, British, and American original imports, then joint ventures and domestic brands flourished. In just 20 years, now everything is heading toward domestic new energy."
Behind the "ice-cold oil and electric heat," this transformation is the result of multiple factors. Rising oil prices have pushed up the cost of using fuel vehicles. Liu Qingsong noted that in May this year, fuel vehicles experienced a collective price reduction. BBA (BMW, Mercedes-Benz, Audi) and second-tier luxury brands launched storm-like price cuts. BMW China adjusted 31 models, with 24 models dropping over 10%; the new Audi A6L was pulled directly into the 260,000 yuan range; the Land Rover Evoque L dropped 226,000 yuan. This price adjustment quickly transmitted to the used car market, and you could even buy a Mercedes-Benz C-Class, BMW X3, or Land Rover Discovery Sport for a few tens of thousands of yuan.
New car price drops led to a "cliff-like decline" in used cars. Liu Qingsong tapped the table: "In the past, annual depreciation couldn't reach 30%, but in this one month, it's been 30%. BMW, Mercedes, Land Rover, Cayenne – all models dropped prices, just in May." The group of new energy used car buyers is also expanding. "Those who have driven fuel cars want to try new energy; rising oil prices make many unwilling to drive gas cars anymore, so they switch to electric cars," Liu said.
Data confirms his statement: In May 2026, the average price of used fuel cars fell over 8% year-on-year; the three-year retention rate of ordinary household fuel cars was only 40%, down over 25 percentage points from 2020; even Japanese B-segment sedans saw three-year retention rates drop below 55%.
Luxury cars that once required markups are no longer glorious. "The Mercedes-Benz G-Class had a markup of hundreds of thousands at most; now not only is there no markup, but prices are lower. A new car cost over 3.4 million yuan, now a used one sells between 1.1 and 1.5 million yuan," Liu said. The Porsche Cayenne was once over 1.2 million yuan, now around 800,000 yuan; the Maybach S480 fell from over 1.7 million to over 1.3 million yuan. "You can no longer use new car prices to benchmark used car prices." Liu described the market as "price without demand": "If you don't sell for 800,000 today, tomorrow might be 780,000; put it away for half a month, and no one will want it for 750,000." Because of this "big discount," the traditionally slow June season was not slow, with many interested customers looking to buy used cars at bottom prices.
"Doing business requires face, but buying a used car is cheap and saves hundreds of thousands — easier than earning them," said Ms. Sun, who was shopping for a Maybach with her family. She told reporters that as new car prices keep falling, buying a used car is more cost-effective. As long as the car's condition is transparent, she and her family have no objection to buying a used luxury car.
Car Prices Change Weekly: "Half of Used Car Dealers Have Quit"
On the afternoon of June 25, reporters arrived at the Luhai Auto Trading Market on Pingxiang Road in Shibei District, where various ordinary fuel cars filled the hall. Used car dealer Liu Ping (pseudonym) said, "A Bentley Flying Spur originally 5.2 million yuan sold for 268,000; normally it should be 700,000 to 800,000. An original imported Touareg nearly 900,000 now sells for 68,000 — not even the tax back then."
"New car prices are pressing down, so used cars have to drop," Liu Ping said. For a 200,000 yuan car, a good condition might only differ by 10,000 to 20,000; for a few tens of thousands, the difference is a few thousand, unless it's a major accident car. Liu Ping lamented, "Last month, we shipped a car back from another province, and by the time it arrived, the price had already dropped."
"If you buy cheap, you sell cheap; if you buy expensive, you sell expensive. It doesn't matter much for those trading cars, but for those selling, the gap is huge." Liu Ping told reporters that if you want to sell a car this year, you definitely won't get a good price.
Another dealer in the market, Wang Qiang (pseudonym), told reporters, "A new Land Rover Evoque priced at 420,000 has dropped to 168,000. Now car prices change every week, and they're still going down." Five years ago, his showroom was full of BBA models from 200,000 to over 1 million; now it's all ordinary brand household fuel cars. Wang said, "Half of the dealers have quit; many are driving for ride-hailing or running barbecue stalls."
"In 2021, an Audi A6 was 450,000; now a new one is 260,000 yuan, and a good-condition used one is bought back at 130,000 to 150,000 yuan," Wang said. Now the number of cars being bought in has increased significantly, "first, many people are switching to electric cars; second, some idle cars at home cost money for parking," so the number of small ordinary fuel cars being recycled has increased.
National data is equally bleak: In May 2026, used car transaction volume was 1.6016 million units, down 4.17% month-on-month, with transaction amount of 105.015 billion yuan, down 7.46% month-on-month.
New Energy Vehicles Also Don't Hold Value: Losing 40-50% in Two Years
On one side is the restructuring of the luxury fuel car price system; on the other is the contradictory coexistence of "high depreciation" and "high growth" in new energy used cars. This upheaval triggered by the new car market is reshaping every link in the used car industry: pricing logic, inventory management, consumer groups, and business models. Reporters found that while new energy vehicles are "conquering territory" in the new car market, they present a complex "duality" in the used car segment.
Liu Qingsong admitted that new energy vehicles have a huge impact on fuel cars — "rising oil prices, smart driving, faster acceleration, quieter, cheap and practical." But the disadvantages are equally obvious: "battery degradation, rapid depreciation, too fast updates, like phones, and range anxiety."
"The new energy used car market is now very hot because of rising oil prices, and many people want to try something new," Liu Qingsong changed his tone, "but electric cars depreciate too much." He took the Li Auto L9 as an example: "A 2024 model, new car around 450,000 yuan, now the buyback price is just over 200,000 yuan — lose more than half in two years." National data is equally shocking. Reporters checked multiple used car platforms and found that a 2024 Tesla Model Y, with an on-road price over 270,000 yuan, sells for only 170,000 yuan after two years, depreciating about 100,000 yuan. Reporters roughly calculated that multiple brand electric cars basically depreciate between 40% and 50%.
However, due to the rapid technological iteration of new energy vehicles and unresolved battery degradation anxiety, their circulation in the used market is far from "explosive." Dealer Wang Qiang revealed, "Currently, the number of new energy vehicles being bought back is not large, because it's not yet time for large-scale scrapping; it's expected in two years." At present, while the number of new energy vehicles being recycled is increasing, it's far from the scale of fuel car sell-offs.
New energy used car transaction volume is still growing. In the first four months of 2026, cumulative transactions of new energy used cars reached 547,900 units, up 29.1% year-on-year. In April alone, 143,200 units were traded, up 21.6% year-on-year.
Reporters questioned: why buy if depreciation is so fast? "The first owner bears the high depreciation; the second owner buys it, drives it for two more years, loses 70,000 to 80,000 yuan, and it's fair," Liu Qingsong explained. Some new energy car owners have switched back to fuel cars.
Ice and Fire: Some Leave, Others Go 'Short and Fast'
New car price cuts mean inventory is risk. However, on the other side of the market, it's a different story. Dealer Wang Qiang pointed to small cars priced at a few tens of thousands in the showroom: "Now small oil cars at 30,000 to 50,000 yuan sell very well." Consumer groups and attitudes have also changed: "Post-00s don't care about face; they just got their license, want a practice car or a commuter. A car worth a few tens of thousands won't lose much when resold."
"Many people are switching to new energy cars, or have idle cars at home that they don't drive and take up parking space, so they'd rather sell," Wang Qiang calculated: "If a car sits for more than a month, it's bound to lose money." He can buy up to seven or eight ordinary brand fuel cars a day, now pursuing "small profits but quick turnover," earning two to three thousand yuan, or even a few hundred, per car before quickly selling.
Liu Qingsong chose another path: stick with mid-to-high-end brands but change the business logic. His main strategy is "short, fast, no inventory." "We buy according to market conditions, sell at a fixed price with minimal profit added. Although thin profit, we move 200 cars a month, building volume." He admits that increasing turnover and avoiding inventory accumulation means dealers no longer earn huge profits from information asymmetry but from the efficiency of capital turnover.
"The used car business is deep, but this wave has eliminated a group of people," Liu Qingsong believes the industry is undergoing a brutal "de-capacity." The era of "selling blindly, buying blindly" is gone forever. Now, large dealers not only bear high capital costs for acquisitions but also need to build assessment, re-inspection, and after-sales teams. "Each car undergoes more than 360 inspections, taking 4 hours, and provides a one-year 30,000-kilometer engine and transmission warranty." Operating costs rise, while per-car profits are razor thin. Liu Qingsong predicts that many small dealers have no profit margin, and used car dealers will consolidate toward the top.
In interviews, industry insiders predicted that 2026 will complete a "big transformation of eliminating the backward and retaining the high-quality," with only about 30% to 40% of dealers able to continue.
For consumers looking to buy used cars and avoid pitfalls, a senior insider offered practical advice: "Choose big stores, ask for full accident records and third-party inspection reports, sign a formal contract, and write in all concerns." He believes the industry is moving away from the "person-to-person" trust-based model toward a transparent transaction model based on "trust in standards."
"The future of the industry is definitely standardization and corporatization." For the tens of thousands of used car practitioners, this test of "ice and fire" may have just begun.
