Once Driving Rolls-Royces, Now Delivering Food! China Lost 30K Used Car Dealerships in 6 Months

Let me show you just how bad business is for physical stores now. There isn't a single car in my repair shop. It's been like this for days. There's not much I can say because there's simply no work. I got curious and called a few other repair shop owners I know. Every one of them had closed a long time ago. Some had gone home to farm. Something else happened yesterday, and it still hurts to talk about it. I went out to eat and saw a man delivering food who used to own a big factory. I couldn't believe my eyes. I'm not saying there's anything wrong with delivering food. It was just such a huge change from the man I knew. He used to drive a Mercedes G-Class, a Rolls-Royce, a Lamborghini, all kinds of cars. He switched between luxury cars throughout the year and brought them to my shop for maintenance. His WeChat Moments posts were always about trips to the Maldives or Europe. Now his feed only shows posts from the past three days. Then I saw something that hit me even harder. I went back to the used car dealership where I used to work to see how business was going. As soon as the owner saw me, he complained that he could barely afford to eat. At first, I thought he was joking. Then I walked into the showroom and saw all those empty spaces. He said, I don't dare to buy cars. I'll just get stuck with them. This whole section was full of bargain cars. They used to stock luxury cars, starting with models like the Porsche 718 Cayman and Porsche 911 Carrera. Now, it's all basic cars costing a few thousand yuan. He said even keeping losses small was a decent result. His salesperson livestreams for more than 10 hours a day, even standing outside under an umbrella when it rains. They still sell only a few cars a day. The used car business has been especially tough over the past two years. Even dealers who rely on online traffic say they can barely cope. Some cannot even cover their rent. One dealer said, those of us using Douyin to reach customers in more ways are barely hanging on. Most dealers sticking to the old business model can no longer keep going. The once busy used car market is now going through a prolonged downturn. Let's stop filming. We keep making videos and haven't sold a single car. I haven't sold anything in three days. I've got more than 100 cars sitting here. I've got everything, gas cars and electric cars. Even the EVs won't sell. I started losing money on EVs last month, too. I've got 40 or 50 EVs in another showroom. All these cars and they won't sell. We're not getting a single inquiry online. Or someone contacts us and deletes us before we've exchanged three sentences. We can't keep doing this. People say the market gets worse every year. This year, it's worse than you could imagine. I even tell my followers they can wait, because prices can fall further. It's true, a car bought now isn't going to go up in value. But anyone planning to sell should do it soon. The market is already terrible, and it keeps getting worse. Worse than you could imagine. . The wave of used car dealership closures is really here. Many dealers simply can't hold on anymore. 2026 started terribly for our industry. Prices have fallen by as much as 30% this year. For a business with so much money tied up in inventory, that's devastating. Dealers using their own money may be able to tough it out, but those who borrowed are in real trouble. Here's the math. Dealers typically finance 70% of their inventory, with 10 million yuan in cars, about 1.4 million US dollars. 7 million yuan comes from lenders, and only 3 million yuan is your own money. A 30% market drop wipes out your entire 3 million yuan investment. about 420,000 US dollars. Lenders don't share that risk. Even as your cars lose value, you still owe every bit of interest. I've never dared to use that kind of borrowing. It can send profits soaring in a strong market, but it can ruin you in a weak one. Almost all of us selling traditional gas cars are losing money this year. The more cars we buy, the more we lose. 倒闭了,实在是扛不住了。 We're closing. We just can't keep going. We can barely afford to eat. I've sold used cars for five years. After talking it over with my partner these past two months, we've decided to leave the industry. Other dealers know how incredibly hard this year has been. Forget making money. The profit on 10 cars may not even cover the loss on one. We bought more inventory after the Chinese New Year, and we've lost money almost every month. If a car doesn't sell within 10 or 20 days, we may already be losing money on it. We don't want to sell at a loss, so we hold on to it. But the longer we wait, the more we lose. Now we've basically run out of money. Once we sell the cars behind me and repay other people and the banks, almost nothing will be left. We're really buying high and selling low now. This business has worn me down. I'm leaving the used car industry for good. China's economy continues to slow. More people are cutting back. High-end spending has weakened first. Luxury cars aren't selling. Mid-range buyers are putting off upgrades, while low-end cars face deep price cuts. A price war in new cars has forced used car prices down as well. The entire automotive supply chain is breaking down. A survey of used car businesses by the China Automobile Dealers Association found that 73.6% of dealers lost money in the first half of 2025. Including interest and rent, the actual share was close to 90%. Other data from the China Automobiles Dealer Association shows that physical used car dealerships nationwide fell from 180,000 to around 150,000 in the first half of 2026. About 30,000 closed in six months. An average of roughly 166 a day. Consider a used car worth 100,000 yuan or 14,000 US dollars sitting unsold for three months. One dealer added up the costs, interest, premises, labor, depreciation, and the loss in value caused by new car price cuts. Together, they total at least 30,000 yuan or about 4,200 US dollars. Selling a car might earn 3,000 yuan, but holding it for three months can mean a 30,000 yuan loss. The more cars dealers sell, the more they lose. Industry data shows that the time needed to sell a used gas car has grown from 30 days to 45 or even 60 days. Some models take more than 120 days. Unsold inventory, tied-up cash, and falling car values have become problems across the industry. Holding inventory means waiting for losses. Used gas cars may lose money gradually. Used all-electric cars can bring much faster losses. One dealer said he would never buy an all-electric car for resale. Battery degradation cannot be seen with the naked eye. Even if the dashboard shows 310 miles of range, checking the battery's actual health requires reading fault codes and testing individual cells. Ordinary dealers lack that equipment and are unwilling to take responsibility. There are three main factors driving used car dealers out of business. First, new car prices are plunging. In 2026, new passenger car prices have fallen 12.6% overall, with an average cut of about 30,000 yuan, or 4,200 US dollars. As new car prices fall, used car values drop with them. Second, information about used cars is becoming easier to find. Online platforms let buyers check accident histories, repairs, and maintenance records. That makes pricing more transparent. Dealers can no longer earn large profits simply because they know more about a car than a buyer does. Third, online platforms have pushed price competition to the limit. Dealers once competed against perhaps a few dozen businesses in their city. Now they compete nationwide. A search for the same car brings up hundreds of listings. Platforms like Auto Home, 58.com and Dongchedi make comparisons easier. Buyers choose whoever offers the lowest price. Dealers have little choice but to cut prices. Eventually, no one makes money. Recently, China's used car industry has also seen a wave of dealers disappearing and financial failures coming to light. The problem is shifting from businesses closing because of operating losses to deliberate financial fraud and owners taking the money. Under intense pressure to survive, some dishonest dealers and dealers with large online followings have used extreme tactics to cash out at others' expense. Recently, Mingxun Luxury Cars, at the number one auto city in Luchao District, Taizhou, Zhejiang Province, suffered a sudden financial collapse. 30 to 40 luxury cars were cleared out overnight, and the owner became unreachable. Several victims suffered heavy losses. The case involves nearly 30 million yuan, or 4.2 million U.S. dollars. Before the cars were moved out on the evening of October 10, the market's management had noticed no unusual business activity. The next day, dealers and employees found an empty showroom with a chain lock on the door. They were stunned. The owner, identified by his surname, Zhu, was also unreachable. The dealership had become an abandoned business overnight. The people caught up in it were all familiar faces. They were dealers and partners who had worked with him for years and treated him like a close friend. Even a prospective employee was affected. One of them was Mr. Xu, who had worked with Zhu for years buying and selling Mercedes-Benz GLC 300s, a car bought for 183,800 yuan, sold for 157,000 yuan. The loss was nearly 30,000. Once ownership was transferred, the sale proceeds should have gone to Xu. Instead, Zhu pocketed the money. Then, Zhu became unreachable, and the money was nowhere to be found. Mr. Zhang had also worked with Zhu for years, trading Mercedes-Benz E300s and BMW 530s. They shared the profits at an agreed rate. In late September, Zhu offered what looked like a profitable deal, jointly buying a BMW M4 for 463,000 yuan. He requested a 231,500 yuan deposit, but Zhang had never seen the car. The BMW M4 was sold, and its ownership transferred on October 10. Zhang received neither his investment nor any profit. I love it. An employee known as Xiao Li was hit especially hard. He applied for a sales job at Mingxuan Luxury Cars on September 22nd. Before he had earned a day's pay, Zhu told him, we need money to turn over some cars, put some funds in, and we'll repay you with interest in two or three days. Li transferred 600,000 yuan that day, about 84,000 US dollars. He borrowed it from relatives and friends, took online loans, and obtained cash through Huabei, a consumer credit service. Over the next 10 plus days, he put in more, bringing the total to over 840,000 yuan, about 118,000 US dollars. More than 820,000 yuan of his principal remains unpaid. Before he could even start selling cars, the young man was carrying 800,000 yuan in debt. Cases like this are common in the used car market. In July 2024, a dealership in Rizhao, Shandong suddenly shut down. Its showroom was emptied, and its sign removed. Several dealers said they had paid in full, but received neither the cars nor refunds. About 20 million yuan was involved. A dealer from Anhui said he and his partner ordered eight cars from Chizhi Auto for a total of 868,000 yuan, about 122,000 US dollars. On June 21, they followed instructions to transfer the full amount to the personal bank account of Chi Hao, who ran the business, rather than a company account. The cars never arrived, and the money was not refunded. Several dealers said Qizhi Auto had appeared to be a substantial local business. It occupied three floors. The ground floor showroom alone covered tens of thousands of square feet and typically displayed hundreds of cars. The dealership had long promoted itself as the Shandong Provincial Agent for Shuai Che Zhixin, a discount new car sales business. It had also appeared in live streams alongside representatives of that company. According to the report, affected dealers formed a group to seek compensation and tally their losses. So far, more than 20 dealerships have been identified as having paid without receiving cars. About 200 million yuan is involved, roughly 2.8 million US dollars. The actual number of victims and the funding shortfall may be even higher. On July 5, Qizhi Auto owner Chi Hao returned to the camera and told his hundreds of thousands of online followers, everyone, I'm bankrupt. In the video, which ran for less than six minutes, Chi Hao blamed the company's collapse on three factors, his own overconfidence, reckless expansion, and high-interest borrowing. He said his control of business risks had been seriously inadequate, and that cash was being drained away in various ways, leaving the company unable to meet its obligations. He asked everyone to give him some time to deal with it. At the end, he said he would try every possible way to resolve the problem, but he offered no specific repayment plan or timeline. Other used car dealers have sold the same cars to two buyers under the label Zero Mileage Used Cars. Buyers who paid in full ended up with neither their car nor their money. These cases involve more than 10 million yuan, or 1.4 million US dollars. In late September, two dealerships in Qinhuangdao, Zhongdian Auto and Mingtian Auto, suddenly closed. And their operators disappeared. They sold zero-mileage used cars online at very low prices. Short videos drew in more than 1,000 buyers who paid in full. Wang Haoxin was one of them. In April this year, he drove more than 340 miles from Anyang, Henan to Qinghuangdao. He paid 135,000 yuan for a BYD Han. That was nearly 20,000 yuan less than at a local authorized dealership. The salesperson promised that ownership could be transferred once the original owner received a trade-in subsidy. The contract set the deadline at June 2, 2027. Wang called on September 19th to push for a transfer but no one answered. The next day the salesperson replied that it would happen around October. Two days later the salesperson changed their WeChat name and the company's official Douyin account was deleted. They could no longer be reached. Another buyer said Zhongdian Auto had also said in live streams that its partner-authorized dealerships were trying to boost sales figures and that sales staff took no commissions. That supposedly allowed cars to be sold below normal market prices. As buyers sought answers and waited for news, the two companies sent customers a notice. They admitted they had run out of cash and could no longer meet monthly loan requirements. They said payments would stop from September 21, and bankruptcy liquidation remained possible. The controlling owner, Li Zheng, became unreachable. The zero-mileage used cars sold by these two dealerships were vehicles that had barely been driven but were already registered in someone else's name. They looked new, but legally they were used cars. Great Wall Motor chairman Wei Jianjun has sharply criticized the sales channel twice. He called it disgraceful, saying it was being used to fraudulently obtain government subsidies and described it as industry abuse. He said the practice grew out of destructive competitive competition. To clear inventory and raise cash, dealers register unsold new cars early and sell them at deep discounts. Some automakers also count vehicles that have not actually been sold as sales, creating a false impression of strong demand. China began testing used car exports in 2019, shipping fewer than 3,000 vehicles that year. By 2025, exports had risen to around 600,000 used cars. About 450,000 were zero-mileage vehicles, a sharp increase. Repeated price cuts on zero mileage used cars have seriously affected both the prices and sales volumes of genuinely new cars. Competition among some dealers, authorized dealerships, and used car businesses has become increasingly disorderly, creating a vicious cycle. If this continues, it will disrupt automakers' entire sales operations and leave no room for profit. When sales targets take priority over everything else, more fake sales appear. Once that becomes widespread, falsified sales data and financial records become an established practice. It then becomes extremely difficult to determine the industry's true condition.