Why Chinese cars often lose value quickly

Dealer discounts cause used car sales to plummet

The new and used car markets are closely linked in terms of selling prices. The price of a used car is usually calculated by subtracting the current price of a new car from its depreciation. Therefore, when new cars are discounted, the selling prices of used cars will more or less follow suit.

Cars from China are no exception to this rule. In the first months of 2024, Chinese car manufacturers continuously lowered product prices to find customers.

Specifically, we can mention the cars under the MG brand. MG dealers recently announced a price reduction of 130 million VND for the C-size crossover model, the RX5. Specifically, the MG RX5 STD version is currently sold for 609 million VND, while the LUX version is priced at 699 million VND.

MG5 VIN 2022 version with a price of less than 400 million VND, which is about 130 million VND lower than the listed price. Similarly, MG ZS - a competitor of Hyundai Creta or Kia Seltos is also discounted by about 100-120 million VND, bringing the car price down to 440-520 million VND.

Along with registration, inspection and depreciation costs, each used MG purchased before the price reduction is likely to incur a loss of up to approximately VND200 million when resold.

Not officially distributed

The lack of official distribution and the car company ceasing business in the Vietnamese market is also a major reason for the depreciation of Chinese car models. Specifically, we can mention cars from the Zotye brand.

Having attracted attention around 2017-2018, Zotye cars like the Z8 offer users spacious space, impressive exterior, a series of modern amenities and reasonable prices.

But not long after that, this brand disappeared from the Vietnamese market. In 2021, in its home country of China, this car company declared bankruptcy, causing once-popular car models such as the Zotye Z8 or Zotye Z8L to officially die.

Zotye's move to "abandon its children" has caused the remaining cars in the Vietnamese market to continuously fall in price. In 2018, when the Zotye Z8 was first launched, to own this car model, Vietnamese users needed to spend 780-800 million VND.

However, at present, Zotye Z8s are being sold for only about 300-350 million VND, half the original price.

Despite such a good price, Zotye Z8s are still difficult to find buyers, due to concerns about repair facilities, and it is also difficult to find replacement parts for discontinued cars.