With the implementation of the ceasefire in the Middle East, China's second-hand car exports have ushered in a phased explosion

With the implementation of the Armistice in the Middle East, China's used car exports are facing a phased explosion of logic, opportunities and risks

1. Why will the armistice directly lead to an export explosion

Centralized release of backlog orders and short-term retaliatory shipments

In the past, the Red Sea and Strait of Hormuz routes had to be avoided. Shipping companies took detours, shipping premiums soared, and ports in many countries were temporarily controlled. Most buyers in the Middle East temporarily stopped placing orders and locking orders to wait and see. Many intentional orders were postponed in the future, and already booked vehicles were piled up at the port. After the situation eased, the route returned to normal conditions, the shipping freight rate also dropped, and the efficiency of ship traffic returned to normal levels. The procurement demand that had been backlog for 2 to 5 months in the early stage was concentrated to fulfill the contract. The United Arab Emirates, Iraq, Saudi Arabia, and Jordan would issue lists in batches first, and shipments in one to three months surged significantly higher month-on-month. The local demand for rigid car purchases has always been relatively strong. The conflict only temporarily suppressed the relatively young population in the Middle East, and everyone's demand for private cars is quite strong. However, during the war, the channels for importing new cars were cut off, and local circulation also stopped. Residents 'demand for cars was suppressed in post-war reconstruction areas such as Iraq, Yemen, and Syria. Engineering transportation and people's livelihood commuting are extremely dependent on cheap used cars; Rich countries in the Gulf (United Arab Emirates and Kuwait) have stable consumption and prefer quasi-new SUVs and new energy used cars within three years. After the conflict subsided, people's livelihood and infrastructure resumed work, and demand for car purchases was simultaneously released.

Logistics costs have dropped sharply, and export profit margins have been restored

Ships were forced to bypass the Cape of Good Hope after the Red Sea route entered a conflict phase, extending the voyage by 7 to 12 days. At the same time, sea freight rates and war additional risks rates increased by 30% to 120%, causing many car companies to slow down shipments. rate. The armistice has helped mainstream routes return to the Suez Canal, shortening the timeliness and declining comprehensive logistics costs; port customs clearance inspections have been relaxed, and detention fees and storage fees have been greatly reduced; restrictions on cross-border business exchanges have been lifted, allowing overseas buyers to visit vehicles on the spot and purchase them in batches., the number of large orders on the B-end has increased significantly.

2. Market structural differentiation in this round of outbreak (focus on opportunities)

Country priorities (priority of volume)

United Arab Emirates (Dubai): Distribution hub in the Middle East, where the armistice was the first to pick up, with the strongest demand for quasi-new fuel SUVs and second-hand trams; Iraq: just needed for reconstruction, with the largest shortage of economical family vehicles and engineering pickup trucks in 5 - 8 years; Saudi Arabia and Kuwait: High-end quasi-new and hybrid used vehicles have a higher premium; Jordan and Lebanon, where policy implementation is relatively strict and the pace of vehicle launch is relatively slow, priority is given to supplying compliant models that meet Euro 6 emission standards

Hot-selling models track

Main fuel sources: Haval, Chang 'an, Toyota SUVs, domestic pickup trucks (the foundation of the Middle East, the core of traffic volume) In terms of new energy growth, second-hand trams of brands such as BYD and GAC Aian have previously been given rise to long-term due to high oil prices in the Middle East. Willingness to replace, now after the armistice, demand has accelerated to cash in on commercial vehicles: second-hand heavy trucks and dump trucks, which have followed the resumption of infrastructure construction to usher in centralized procurement.

summary

The ceasefire in the Middle East has brought about retaliatory volume increases and concentrated order performance dividends in the first to third quarters in the short term. It is a repair market that suppresses demand. Coupled with the fall in logistics costs, the industry's prosperity has become more certain; small and medium-sized businesses give priority to stabilizing orders, controlling inventories, and seizing the short-term window period.

Source: Xiong Yu, digital automobile export

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