China is one of the world leaders in car production, and even the country's domestic market is estimated at millions of units. What they don’t produce here: exact replicas of world brands (BMW, Toyota), their own export brands (Geely, Lifan, Chery), giants focused only on the domestic market (Changan, Dongfeng and others). Those who believe that it is pointless to drive cars from China are definitely wrong. Another question is that this process is very labor-intensive, and at each stage a person faces his own difficulties.
Is it profitable to buy cars in China?
The cost of new and used cars in the Middle Kingdom is significantly lower than in Russia, the difference reaches several thousand dollars. For example, a new Tiggo 5 in good configuration costs 89,900 yuan (about $13,000), in Moscow - about $14,000 in the minimum configuration, Chery Arrizo 5 in China costs 58,900 yuan (about $8,900), in Russia - about 11 thousand dollars. Of course, car houses there regularly hold promotions and offer discounts, so the difference on the cheapest cars can be 2-3 thousand dollars.
If you pay attention to less popular brands, then the prices may seem tempting. Here you can easily buy a car that looks beautiful and is comfortable to drive for 5-6 thousand dollars. Another question is how the “dark horse” will perform in operation.
What do professionals say about car delivery from China?
The laboriousness and complexity of the procedure makes experts doubt the feasibility of the project. In an unfamiliar country, it is difficult to check the physical condition of a used car; the Chinese may well “unscrew the speedometer counter”, underestimating the car’s mileage. Therefore, the only option for independent purchase is to work with a trusted compatriot.
Another way to purchase a car is to seek help from specialized companies that provide professional intermediary services. Dealers either select cars to order or give one of the special offers that they receive through market monitoring.
Why is the cost of cars rising in Russia?
Since ancient times, the Russian Federation (and now also on the territory of the EEC) has had protective duties designed to “protect” the domestic market from the foreign automobile industry. This payment is popularly called “customs clearance”, and its values are the same regardless of the origin of the car. By purchasing a vehicle in Germany, the USA or China.
The cost of customs clearance depends on the following parameters:
- The price of the car (reflected in the sales contract);
- Engine capacity (in cubic centimeters);
- Engine power;
- Vehicle weight;
- Age (less than 3 years, 3-5, 5-7, over 7 years);
- Motor type;
- Buyer (individual or legal entity).
There are several ways to deliver a car from China:
- At your own pace. The price consists of the cost of gasoline and overhead costs (hotel, driver’s meals), and is only suitable for residents of cities that are relatively close to China.
- By car transporter. A relatively expensive, but more reliable method ensures both efficiency and safety of the car, since the vehicle will be in motion almost all the time.
- By train. One of the best methods for the price, it is justified only if the car’s safety is ensured along the way. There are frequent cases of dismantling of cars (dismantling of wheels, radio, body parts).
- By water vessel. This method is one of the most economical, but you will have to wait much longer for the purchase. Ideal for residents of port cities (St. Petersburg, Vladivostok).
The procedure for customs clearance of a car (using the example of St. Petersburg):
- Selecting the import method (on your own - as a driver or passenger, unaccompanied cargo, forwarding method);
- A visit to the place where the car was registered (there are several of them in St. Petersburg - for example, at the address: Kultury Ave., building 40A);
- Depositing funds (informing about your intention to bring a car from China, you need to indicate information about it that affects the amount of customs duties);
- Obtaining a customs receipt;
- Crossing the border (if the buyer drives the car himself, he needs a civil and foreign passport, a car purchase and sale agreement, a registration certificate, and when using the services of an intermediary, a warranty certificate);
- Completion of the procedure (the car must be delivered to the place of registration).
To implement the task, an extensive package of documents is required:
- Customs receipt;
- Declaration in form TD-6;
- Vehicle registration certificate, translated into Russian, notarized;
- Purchase and sale agreement (bill of sale or invoice);
- Notification of the vehicle being in a temporary storage warehouse;
- Transit declaration.
All documents received in China must be translated into Russian in advance.
During customs clearance, in addition to the import duty, you will have to pay a recycling fee. Also, the car must comply with an environmental class of at least Euro 5. But many cars from China do not meet this requirement. Such vehicles will not be allowed to operate in the Russian Federation; they simply will not be issued a title.
By the way, most Chinese cars sold in Russia are assembled in our country. Assembly plants receive components and assemblies from the Middle Kingdom in order to minimize the cost of import duties. After all, you need to pay much less at customs for components than for a finished car.
How to clear a car through customs if it is not moving under its own power?
The procedure for customs clearance of a car from China will not differ from the generally accepted one: the car will be delivered to a temporary storage warehouse, after which the buyer needs to go to the place where the goods are registered, submit the above documents, and complete the procedure.
Planning a car delivery route from China
A tourist traveling to China to buy a car requires a category F visa. Most often, cars are purchased in Beijing and other large cities. You can drive a vehicle only if your driver's license is confirmed in the PRC. This procedure is not difficult, but it takes time, so such a permit is only issued to people who regularly visit China.
Having bought a car in China, it is easier and cheaper to send it to Russia by rail or sea. A car transporter will cost a little more, since the route is much further. It is worth noting that accompanying organizations represented in both China and the Russian Federation can simplify the purchase and delivery process.
Let's sum it up
So, buying a car in China is a troublesome matter, and the benefits for the buyer are not so obvious. You will have to pay for an expensive flight (moving to China), experience difficulties translating documents for the car into Russian, hire a carrier, or cross the border yourself. Considering that the price range for cars in Russia and China is not so high, it is easier to find a suitable make and model for yourself directly in the Russian Federation. Automakers from China are currently engaged in dumping, trying to capture the market, which has had a beneficial effect on prices.
The sales volumes of new cars in China are astounding: for comparison, 1.6 million cars were sold in Russia last year, and over 2 million were bought in China in September 2018 alone. The total annual result in 2017 was - just think about it - almost 29 million units! And given the pace of sales, even taking into account the “low base”, that is, the extremely low level of motorization in the country several years ago, the volume of the secondary market is also growing by leaps and bounds. And this means not only economic growth and good purchasing power of the population, but also the emergence of new issues that simply did not arise before. And one of the main ones is what to do with used cars?
It would seem that the question is simple: given the production volumes, you can simply expand processing by sending old cars for scrap and melting down. However, the Chinese government, which is gradually abandoning its status as the obedient “factory of the entire planet,” is also aware that large-scale processing of such a volume of cars will inevitably affect the environment, the improvement of which is now being taken very seriously in the country.
Therefore, despite the seemingly irrational “outflow of recyclable materials,” the country’s leadership listens to major players in the secondary market who talk about the need to open official exports of used cars. One of these players is Xingyuan Automotive, a comprehensive business platform operating both in the field of used car sales and in the field of related financial and insurance services: this company has become one of the main lobbyists for allowing exports, planning, of course, to expand its business thereby outside the country.
By the way, speaking about the export of used cars from China, it is worth understanding that we are talking not only and not so much about cars of “domestic” brands, but also about those cars that are produced in joint ventures with foreign companies. FAW-Volkswagen, Beijing-Benz, Changan-Ford, Dongfeng-Honda, FAW-Toyota and many dozens of other joint ventures produce cars both for the domestic market and for export, so not only Chery, but also “used” cars will go abroad. Dongfeng and Chanan, but also numerous Toyotas, Volkswagens, Suzukis and Chevrolets.
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Where will the cars from China go?
However, just a green light from the government is not enough for cars to start flowing from China. Yes, Chinese business does not expect this: they are thoroughly preparing for the upcoming “opening of the border.” Well, who can you look up to when it comes to exporting used cars, if not the most successful and experienced exporters? Here we are obviously talking primarily about Japan, which we will talk about in more detail in a future publication.
In 2017, the land of the rising sun “gave” the world 1.3 million cars from its secondary market. Given that the number of used car registrations during the same period amounted to just under 7 million, it can be logical to conclude that exports account for a significant share of aftermarket sales. For comparison, in the United States, where sales of new cars are disproportionately higher (more than 17 million units in 2017) and the number of registrations on the secondary market is huge (38.5 million), exports amounted to only 800 thousand cars. This can be explained both by the activity of the secondary market, where used cars are in high demand, and by the fact that a significant share of this market is made up of a fairly old vehicle fleet, which has a very low export potential.
Undoubtedly, in addition to Japan and the United States, Europe is the other largest exporter of cars. However, the situation here is mixed: a large share is made up of exports of used cars from one country to another within the European Union, which makes it difficult to identify exports outside its borders in total volumes. But the high share of intra-European exports is also confirmed by the fact that in the EU there is a clear trend towards a division in the average age of the vehicle fleet. Thus, the average age of the passenger car fleet throughout Europe, which grew last year to 323 million units, is 10.7 years, however, for example, for Luxembourg and Belgium it is 6.2 and 7.7 years, respectively, and for Latvia and Lithuania – 16.3 and 16.7 years, which is even higher than in Russia, where the average age of the vehicle fleet, according to Autostat, is 13.1 years.
Another important factor that encourages the Chinese to export used cars is the dynamics of sales in the primary market. Despite the enormous strength of this market, sales on it are not growing steadily and constantly: in particular, in recent months, sales growth compared to last year has dropped significantly and fluctuates around 5%. Several different factors are to blame for this, including the recently legalized system of loans between individuals, due to the low level of organization of which many lenders faced the loss of their savings.
It is also worth taking into account that the primary market is negatively affected by taxi and car sharing services: DiDi, CaoCao, and so on. However, there is no doubt that the potential of the Chinese market is enormous and it is necessary to continue to increase sales of new cars. Against this background, Chinese businessmen rightly believe that too rapid an increase in the volume of used cars will negatively affect the primary market, so the secondary market, which added 10% compared to last year, should remain under control.
And it is export that will become one of the tools of this control.
The above, however, is also true for the “model” market for China – the Japanese one. The Chinese consider the Japanese experience in distributing flows in the secondary market, where 20% is exported, to be almost ideal, and this is what they plan to focus on. But the alignment with Japan in preparation for the opening of exports is not limited to this: the largest players in the secondary market are studying the structure of the geographical distribution of flows of Japanese used cars. Indeed, despite the big difference between the products coming from China and Japan, the target markets will actually be common: these are countries with a low level of their own automobile production, as well as countries that primarily import cars, including used ones.
The market structure of importing countries is not so difficult to guess. So, for Japan, the key “clients” are small Asian countries such as Myanmar, Pakistan and Sri Lanka, the African continent represented by Kenya, South Africa, Uganda and others, some South American countries like Chile, as well as right-hand drive New Zealand, being one of the largest importers of Japanese cars. It is worth considering that some importers - in particular, the largest one, the UAE - purchase them not to replenish their fleet, but for further resale to Kenya (about half), Central Africa, Pakistan, Afghanistan and other countries.
However, China is going to and can not only participate in the “division of territories”, but also literally take the lion’s share of demand in some markets. In some places, this is facilitated by new legislative restrictions: for example, the Myanmar government at the end of 2017 banned the import of right-hand drive cars - and they, for a second, make up about 90% of the country’s entire used car fleet! So the Myanmar market, which until 2017 was one of Japan’s key importers of used cars, will now go to China literally without a fight.
But this is only the most striking example, and in general, China’s entry into this market will be especially important for countries with right-hand drive, which are now actively importing right-hand drive cars that are “wrong” for them. In conditions of equal competition, left-hand drive cars from China will definitely win their share - for now the only question is what it might be.
Countries with right-hand traffic are marked in red, countries with left-hand traffic are in blue.
How will China convince people to buy their cars?
Introducing a new player to the market, even a potentially strong one, is always a difficult task. The Chinese understand this very well and do not expect that taking away market share, especially from Japan with its traditionally strong positions, will not happen on its own. The above-mentioned company Xingyuan Automotive, in particular, is planning a large-scale campaign to enter foreign markets, taking into account its own experience of doing business in China, as well as the experience of the strongest exporters - primarily Japan, of course.
First of all, when developing a strategy, Chinese business expects to learn from Japan’s successful experience in selling cars via the Internet, in particular at auctions. The spread of smartphones has long outstripped the level of computerization of the population even in poor countries, and online sales are seen as one of the drivers of trade. However, the matter, of course, will not be limited to them: work is also underway to search for local dealers who will be engaged in both the transfer of cars ordered via the Internet to customers, and the sale of cars imported without pre-order. A common large online platform will unite dealers into an integral network and will allow you to order a car “from start to finish”: from choosing a specific car, indicating its mileage and technical condition, to the moment it is issued from the most convenient dealer.
The next step to strengthen our position in foreign markets is the introduction of a system for selecting, ordering and supplying spare parts. The Chinese plan to increase customer loyalty by relieving them of the fear of being left without parts and consumables for repairs and maintenance. Moreover, it promises not just the ability to select and order spare parts from China, but also local warehouses that will stock the most current consumables and parts.
The third “success factor” is the elaboration of the issue of actual car repair. The plans include developing, in parallel with the dealer network, a pool of service centers that will repair sold cars. Of course, we are not talking about creating a service network from scratch - these will mainly be cooperation agreements, within the framework of which service centers (both dealerships themselves and independent ones) will repair the fleet arriving from China.
Well, the fourth component of the sales foundation should be our own financial and insurance products and services that will be offered for the purchase of a car. To summarize everything that was said earlier, Xingyuan Auto actually offers a business model that operates in the primary market, starting from the choice of a car, its purchase with the possibility of using credit funds, insurance, as well as subsequent repairs and maintenance - all within one platform, which should connect into a single chain of car manufacturers, dealers, spare parts manufacturers, as well as the actual end buyers of cars abroad.
Not everything is so smooth
Of course, such a good and harmonious-looking business plan cannot have shortcomings and pitfalls that will inevitably appear during the implementation and operation process.
First of all, by adopting the experience of the best in Japan, China should take into account not only factors that are convenient for itself, but also those features that distinguish Japan favorably in direct comparison. Here we are primarily talking about the peculiarities of operating cars - both consumer vehicles and those dictated by the state. Constant renewal of the vehicle fleet, gentle operation in mild climates, well-developed road infrastructure and quality of the road surface, as well as mandatory and objective technical inspection - these are the key factors leading to the fact that a used Japanese car has become a desirable purchase, often even despite the fact that the steering wheel he is on the wrong side. In China, there is no single mandatory technical inspection procedure, and the provinces that set their own rules do not go deep into the nuances. As a result, even a cursory glance at the vehicle fleet is enough to understand that cars are not always perfectly maintained and repaired regularly, and the older the car, the more true this thesis becomes.
The second most important factor contributing to the popularity of used Japanese cars is an honest and objective system for evaluating them when selling at auctions. When choosing a car, you can be sure that a high score really means excellent technical condition, and all shortcomings are indicated in the checklist. Creating such a culture of auction trading from scratch is a much more difficult task than it might seem. Meanwhile, this is where customer trust begins, winning your audience and strengthening your market share. So this factor, aggravated by the previous one, should definitely be considered one of the main difficulties when implementing a “single platform” and establishing stable sales.
The third nuance, which, however, can be taken into account at the project development stage, is the specifics of the technical requirements and taxation of imported cars in each of the potential importing states. For example, Kazakhstan, which is among the countries to which efforts will be directed to organize imports, is part of the Customs Union, and only cars that meet the requirements of an environmental standard of at least Euro 5 are allowed for import.
Another potentially important region for China is the countries that are members of the Association of Southeast Asian Nations (ASEAN): Malaysia, Thailand, Vietnam, and so on. And here it is worth considering that import into these countries is relatively cheap only for those cars that were produced in ASEAN, while cars imported from other countries are subject to significantly higher duties. Thus, although these markets (especially Malaysia with a low level of motorization of 360 cars per thousand people and high development potential) remain very interesting, entry into them is only possible if imported used cars are price competitive in comparison with those already offered on the local secondary market. And here we come to another feature of the Chinese market.
The new initiative of Chinese business to organize exports has not only supporters, but also skeptics. The latter, in particular, rightly note that the secondary market in China is similar to the Russian and some others and is contrasted, for example, with the American or most European ones in terms of pricing. Cars here retain a relatively high residual value, which does not fall as much as in countries with a high level of motorization. It is not difficult to draw conclusions based on this: taking into account the local price, multiplied by import duties and transportation costs, used cars from China in some cases may simply be uncompetitive due to the high final cost. This is especially true for cars that were not manufactured in China, but were imported new into it - such models have little chance of leaving the country. However, in many markets - in particular Russian - the trends are the same, and therefore not the lowest prices can still be competitive.
Well, concluding the conversation about who may not greet the initiative to open exports as positively as private business, it is worth mentioning, oddly enough... Chinese brands themselves. The fact is that many of them - Geely, Chery and so on - are now in their formation phase, entering new markets and improving both the quality and status of their own products. And what could be more destructive and destructive for building a new image than the influx of old models, reminding buyers of what they are being forced to forget... Against this background, it is especially interesting to see what the confrontation between “the dark past, the promising present and the bright future” will be like. in countries like Russia, where in the minds and on the roads there are still memories of what came to us before.
At the same time, Russia is with moderate optimism, but still named among the countries included in the target list. This is facilitated by geographic proximity, the “correct” location of the steering wheel, and the still not the highest degree of motorization - that is, with a competent approach and decent prices, our market is capable of absorbing a certain number of used cars. However, China is well aware that the emphasis on localizing production and stimulating sales of new cars in our market are not random measures, and one cannot seriously count on large volumes of imports here. In this regard, the Chinese see neighboring states represented by Kazakhstan and Mongolia as even more promising.
Wait and see
So far, the economic forum on the export of used cars, held in Qingdao, is only one of the first steps towards building everything that representatives of the private automobile business in China are talking about. Grandiose plans, large-scale projects and a model worked out on paper undoubtedly look interesting, and some real political and economic changes like the ban on the import of right-hand drive cars into Myanmar only fuel this interest. We should see the first results of China's work on a new path for it at the beginning of next year, and we will certainly monitor this process. And in a year and a half, it may be possible to evaluate the successes, which is called “with the naked eye” - if the import and investment climate in Russia turns out to be quite favorable.
Do we need to import used cars from China?
LCM Group offers professional customs clearance services for spare parts from the USA, Europe, China and other countries of the world. If you have the necessary papers and an experienced customs representative, the service takes no more than one day.
Other services of a licensed customs broker LCM Group:
- Registration of certificates for goods.
- Collection of necessary documents from product manufacturers.
- Organization of regular deliveries.
- Presence during inspection (checking the legality of the actions of the customs service).
- Comprehensive legal support: from drawing up a declaration to representation in court.
- Drawing up detailed reports.
- Consulting on any issues of customs clearance of goods.
Find out how much customs clearance of your shipment of spare parts will cost by calling the company. Below are the specifics of the design of this group of products.
Features of customs clearance of spare parts in the Russian Federation
- Customs clearance is carried out on a general basis: without paying state duties, you can transport cargo whose weight does not exceed 35 kg and whose cost is 65,000 rubles.
- When clearing spare parts through customs, a customs duty of 5% of the customs value of the cargo and VAT (18% of the customs value of the cargo), but not less than 4 euros per kilogram of cargo, is paid.
- When importing an engine for any car, it is necessary to issue a PTS - vehicle passport.
It is in the interests of the carrier to reduce the customs value of the cargo as much as possible in order to reduce costs and the final cost of the goods. This is where a licensed customs representative comes to the rescue: a specialist knows how to reduce the price using catalogs and documents from the manufacturer. For large deliveries, his services pay for themselves instantly.
Cost of customs clearance of spare parts
Taking into account the paperwork, entering the organization into a special register and customs clearance of spare parts for cars and other equipment, customs clearance takes no more than three days.
LCM Group is a certified customs broker
Only certified customs representatives have the right to provide intermediary services between business and customs.
LCM Group has been officially involved in customs clearance of imported goods since 1998. The organization is a member of the Regional and National Associations of Customs Brokers of Russia, provides services in all cities of Russia and has branches in key transport hubs of Eurasia.
The problem of “Euro plaques” has already set the teeth on edge, discussed from different angles. And invariably, in every debate on this topic, there is an argument that customs clearance of cars in other countries is several times cheaper than in Ukraine.
Amounts of $300-$500 are mentioned, however, when trying to find out where these amounts come from, it turns out that no one really knows anything about customs clearance of cars in other countries. So let's figure out how this actually happens.
This is the second publication in the series of articles “Customs clearance in other countries.”
In the first article we looked at the legislation and features.
And today we will “take on” the states famous for their automobile industry - Japan, South Korea and China.
Customs clearance of a car in Japan
Curious what customs clearance is like for cars in Japan, a country whose cars are loved all over the world? After all, the government of this state probably somehow protects its producers.
But, in fact, you don’t have to put any effort into this.
Firstly, Japan is a country of leading automakers Toyota, Nissan, Honda and other brands. That is, the Japanese have enough of their quality cars.
Secondly, Japanese residents consider their cars to be of higher quality than foreign ones.
Thirdly, the annual vehicle tax in Japan increases exponentially with the age of the car, and car repair services are expensive. Therefore, it is more profitable for a Japanese to constantly buy new cars than to maintain old ones.
Fourth, you can't even imagine how Japanese car dealers court their customers, vying with each other to offer a lot of “goodies” for buying a car from them. They include gifts paid for by the insurance dealer, months of free service and car washes. The Japanese are used to this and do not accept the policies of European or American car dealers.
As a result, more than 90% of cars on Japanese roads are Japanese.
Americans and Europeans at one time tried to conquer the market of the Land of the Rising Sun, but always failed.
However, Japan still has protective legislation protecting domestic production. And few people think of importing foreign cars there privately.
First of all, you will have to spend a significant amount of money on shipping the car to island Japan.
Then shell out a lot of money for customs clearance and certification of the car. And then you will also be subject to registration taxes, which, by the way, do not apply to cars older than 10 years. And don’t forget that customs clearance of an imported car is only possible if you are the owner of a registered parking space, and this is expensive.
Certifying a car for compliance with Japanese safety, environmental friendliness and noise standards is also very difficult. To prove such compliance, the machine must pass many laboratory tests. Their total cost varies between 200,000-300,000 yen ($1,770-$2,660).
Taxes for customs clearance of cars in Japan:
- duty – 10%;
- VAT – 20%
- purchase tax - 8%;
- safety and environmental certification – $1770-$2660.
In general, there are no draconian measures on the import of foreign cars in Japan. It’s just that in this country few people want to drive non-Japanese cars.
Customs clearance of cars in South Korea
South Korea is another country known for its strong auto industry. It is the fifth largest manufacturer and sixth largest exporter of automobiles in the world.
The largest South Korean automaker is Hyundai Kia Automotive Group.
Foreign cars are found here, but they are more expensive than domestic models. But you won’t see “Japanese” in South Korea - they are strictly prohibited from being imported into the country.
Now let’s try to dispel your myths. There is an opinion that customs clearance is very expensive in South Korea. But, in fact, this is not the case now.
To date, South Korea has established special relations with several countries. It has signed a free trade agreement with the United States, the European Union, Canada and Singapore, under which new and used cars from these countries can enter the Korean market duty-free. However, this did not change the car market in South Korea in any way - the fact is that cars from these countries are extremely unpopular here. This is explained by the thriftiness and special scrupulousness of Koreans regarding the environment.
American cars in Korea are considered too “gluttonous” and expensive, and there is little trust in Europeans in terms of their environmental friendliness.
Even before dieselgate, the Koreans strictly controlled the cleanliness of emissions, but after the scandals with leading automakers, they finally lost interest in them. So now South Koreans mostly drive their own cars, the most popular being Hyundai and Kia.
The main difficulty when importing a car to Korea is its certification for emissions, noise and vibration.
Taxes for customs clearance of cars in South Korea:
- VAT – 10% ;
- excise duty – 10%-20% depending on the engine type;
- acquisition tax upon registration – 7% .
As you can see, the South Koreans, like the Japanese, do not need special measures to curb the import of foreign cars. It’s just that both of these countries produce excellent domestic cars, and they don’t need foreign ones.
Customs clearance of a car in China
China is a huge country divided into provinces. And each of them has its own rules for importing and registering a car.
However, there are three common components due to which the import of foreign cars is regulated in the Middle Kingdom. The first is that the country has enough of its own automakers. The second is overpopulation. The third is bad ecology. Guided by these reasons, the Chinese government seriously restricts the import of any goods in general.
You can import a car into China, even your own, which was exported a couple of months ago, only if it is no more than a year old. Even importing a rare car, declared as a museum piece, may turn out to be impossible.
Also, if you want to privately import a car into China, it will have to undergo a lot of tests to ensure compliance with local safety and environmental standards. One of these tests is a crash test, and in order for it to be carried out, you will have to provide...another same car that will be crashed. Thus, although private import of cars into China is not prohibited by law, it is actually impossible.
Another interesting detail is that under no circumstances will you now import a motorcycle or a diesel car into China - the import of these goods into the country is prohibited. You can import a right-hand drive car, but no one will register it.
Customs clearance of a car in China itself involves three types of taxes: duty, VAT and consumption tax. The duty is calculated based on the price of the goods declared by the importer + transportation costs + insurance + all payments for unloading and handling of cargo at the port. VAT is derived from the sum of everything previously listed + duty. And it is worth considering that it is impossible to declare what price you want for the goods - Chinese customs will carry out the assessment themselves.
True, there are free trade zones in China - they apply preferential import tariffs. But getting into such a zone is very difficult.
Taxes for customs clearance of cars in China:
- duty: very much depends on the exporting country. Here China takes into account whether it has special agreements with a given state. For a long time, for many countries, the import duty on cars was 20% and 25%, depending on the type of car. . But, from July 1, 2018 it has been reduced to 15% ;
- VAT – 17%;
- consumption tax (in China it is called luxury tax) – ranges from 30% to 45% depending on the car;
- Import tax on luxury cars (worth more than $190,000) is 10%.
In general, it is difficult to calculate the amount of customs clearance for a car in China, and no one undertakes to do this in advance, because many variables are involved in it, incl. mood of the customs officer. But, in any case, this amount is very high, and is at least 100% of the cost of the imported car.
A story about China would be incomplete without telling us that there are gray and black channels for importing cars. Yes, for money here they can fulfill almost “any whim.” But a car imported under the gray or black scheme cannot be registered. Only collectors of rare cars use such methods.
And finally, it should be said that clearing a car through customs in China is not so bad, the main thing is to register it after that. Due to overpopulation, China, like Singapore, has introduced quotas for vehicle registration. To be eligible to register a vehicle, you must participate in a license plate lottery. Sometimes this process can last for many months, and having received such a right, you will still have to pay several thousand dollars for the numbers.
conclusions
It seems that states with a developed auto industry must have strict restrictive laws on the import of foreign cars. However, as you can see, this is not at all necessary.
Yes, in China, car customs clearance fees are high.
But very successful countries like Japan and South Korea are not particularly bothered by this.
It’s simple: when a state has excellent car production, most citizens will prefer them to foreign brands. So, I would like to advise all Ukrainian businessmen who cherish the hope of reviving our automotive industry to work primarily on product quality, and not on lobbying interests to increase import tax rates.
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The opinion of Russian motorists about Chinese cars is gradually changing for the better. It has not yet reached mass demand for premium brands, and we are talking only about vehicles in the budget segment. But here, too, the Chinese are successfully squeezing out their competitors, and the advantages and disadvantages of Chinese automobile industry products are already well known in Russia. Therefore, we decided to tell you how to buy a Chinese car in the most profitable way.
How to buy a car abroad
It is no secret that car prices in Russia are still higher than in many developed countries. Citizens are always looking for ways to get out of the current situation. Tours and self-drive trips have long become popular, but today orders via the Internet are coming to the fore.
You can buy a car abroad in almost the same way as in Russia. Car dealerships, showrooms, online trading platforms and auctions work approximately the same everywhere. You can search for a car using advertising in the media. Abroad, just like here, new and used vehicles of all types are sold, and the sellers are private individuals or companies. The deal is executed in almost the same way. Often our compatriots buy cars directly from the factory.
The motivation for the decision to purchase a car abroad is clear – benefit. It can be significant, despite the overhead costs and the need to equip GLONASS. All work can be done independently or with the help of intermediaries.
The benefits of purchasing a Chinese car
Prices for new cars in China are, for obvious reasons, lower than in Russia. Localization of production is not yet planned, although the Celestial Empire has long become the world's largest car market. The second largest national vehicle fleet is concentrated there with a huge selection on the secondary market.
More than half of the cars are produced jointly with global auto giants such as Volkswagen, Toyota, GM, Hyundai, Honda, etc. There are our own export brands and those aimed at the domestic market. The world's best design studios work on Chinese cars; they are equipped with modern engines and transmissions. The quality of service, spare parts, consumables, fuels and lubricants, and roads is growing rapidly in the country.
The cost of used cars in China, with the exception of imported ones, is significantly less than in Russia. Chinese manufacturers stimulate sales in the domestic market, so the price difference can reach several thousand US dollars.
And if you pay attention to brands that are not very well known among us, the prices can amaze you with their affordable prices.
Risks when buying Chinese cars
There will be much fewer problems if you buy Chinese used cars from us. There are a lot of salons of official manufacturers in Russia. Some even participate in recycling and trade-in programs. Constant discounts and promotions accompany the activities of Chinese sellers trying to conquer our market by dumping. And they are gradually succeeding.
Chinese cars are widely represented on the secondary market and on online sales sites. For an affordable price, you can choose any type of vehicle, including premium. Still, we have begun to evaluate them based on price-quality ratio. And if you take into account the rich configurations already in the database, the buyer will not go wrong with the choice.
conclusions
So, buying a car from China with delivery seems, at first glance, to be a very difficult and risky business. However, the venture can be very profitable. To do this, you will have to learn to understand the intricacies of customs clearance, the confusing laws of the two countries, count money correctly and take smart risks.
Can foreigners buy a used car in China: Video
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