Hello

I am looking for someone who would like to import luxury used cars for resale like Porsche, BMW, Lexus etc

I have a friend in the Bank reposession business with regular access to luxury used cars in Canada

For example, we can by a 2006 Porsche Cayenne S, 24km, 19in wheels, sunroof, leather for less than 300,000 RMB. From my research it appears this vehicle sells here for at least double that. I know the import taxes and duties are quite high, but even after all that surely there is room for some profit.

The time for this business I believe is NOW, due to the high value of the Renminbi, and also the liklyhood of many people defaulting on their car payments due to the financial crisis. We may find ourselves with many reposessed cars on the market in Canada the same way there are many houses on the market. They need to be bought up quickly before the RMB starts to devalue and it is no longer financially worthwhile to import these vehicles

Please contact me if you have any interest in this business (info at consultingelite.com)

Thanks

After import taxes and duties there is NO room for profit.

Hello Cylon

Do you know what the Import taxes and duties are ?

Do you know what a 2006 Cayenne Sells for currently ?

Perhaps your statement is correct, im not saying you are definitely wrong. However can you please prove there is no room for profit ?

If you can prove there is no profit potential I will thank you for your insight and give up on this venture now.

Please tell me what basis there is for your statement

Much appreciated

Thanks

We looked at importing a 96 Lexus LS 400. Total duty and VAT would be 56% of the car's ORIGINAL list price. Again - this was a 1996.

Shanghai is one of the most - if not the most - stringent ports in China in terms of strictly applying the regs. Suggest if you're serious about the business, you try to hook up with locals in smaller port cities. They may be able to get more favorable treatment.

Hello Lovebox

Thats very useful information. Thank you. I had read that the import duty was about 60% in total, but there are different opinions on what it is based on. Some people have said it is on the declared/invoice value including shipping cost. Some however, like yourself, have said it is on the original list price.

If it is indeed based on the original list price, is it based on the China list price (I assume so) or the Foreign USA/Canada original list price ?

Thanks

You also need to remember that there is no 'used car' market in China currently, being such young marketplace.

So selling them on in an environment where the consumer is focused on buying new will also present its own challenges.

Tax depends on the landed costs and the original retail prices somehow I think. Its around 105% I think at the moment. You have to take into account the new consumption tax that will affect resale of these vehicles with larger engine sizes.

Its all about protecting sales of locally produced vehicles....

Oh, and you may also struggle with manufacturers warranty in some cases.

Jonny 76

I understand the used car market in China is quite weak right now. However, I believe for the luxury cars the used car market has a lot of potential. Especially if the cars are only 1 or 2years old (still under manufacturers warranty)

I agree the warranty may be an issue, however, the highest cost for repairs in the West is labour, and here labour is very cheap. Most car parts are manufactured here also so getting parts will be easy. Further, the cars I am thinking of importing will likely sell for close to 1 million RMB, so the clientelle are not short on cash and won't worry about the occassional repair bill (in my opinion).

This may be a total waste of time im sure, but all businesses must be researched like this first. I am sure there is a market for "slightly used" luxury cars. There must be, as these cars are in high demand. Who wouldn't want to save a few hundred thousand RMB for taking a car that's 1 or 2 years old ? They still get the "face" or status of owning a Porsche or BMW without the hefty price tag.

Thank you all for your feedback, its certainly useful, but so far I still think its possible. But I also accept that it may also be impossible. We will see ...

Interesting points, I'd like to add some thoughts on.

-Labour is cheap per se, but not necessarily when you still need to go to authorised repairers for work as they are the only sources with skilled and equiped technicians. The 'specialists' that we see in Europe and the US who work on such brands do not really exist yet in China and certainly do not have the resources and capibilities of the dealer networks.
Parts - agreed, many are made in China but it doesn't mean they are readily available. They are also subject to high taxes when they are bought back into the country as supplied by the vehicle manufacturer.

As for worrying about the occasional repair bill - I came across a company running a $20million helicopter who were worrying about putting an extra $100 worth of oil into the engine.... ;o) You wouldn't believe what people won't spend on their cars... its all about living for today and worrying about tomorrow when it happens.

I'm not for a moment suggesting that its impossible to make money, but believe me, its an industry that I am very familiar with and I already know that the people running similar businesses are not finding it easy. 'I have heard' that it often ends up having to run illegally to make it financially worthwhile.

An interesting project... Good luck!

Maybe you could fill the wheels with BC weed ..

Jonny76

Thank you for your comments. You seem to know what you are talking about and Im sure you have more experience than me in this industry. The more I look into this the more barriers come up. Again, I am sure it is possible, however its becoming more and more difficult the further I get into it.

If you are "familiar" with this industy, then you are more likely to take a stab at this than I am, and you obviously haven't. Not because you don't have a good source in the West like me (that would likely take less than a day to find) but because you know how difficult it is.

I will let the other "feelers" that I put out run their course, but if nothing special comes of that (ie a good "guanxi" in the customs or something of that nature) then I will likely forget this one and move on to other things (with the crap economy now I'm not sure if there's much out there)

Thank you all for your insights.

eliteconsulting wrote:Hello Cylon

Do you know what the Import taxes and duties are ?

Do you know what a 2006 Cayenne Sells for currently ?

Perhaps your statement is correct, im not saying you are definitely wrong. However can you please prove there is no room for profit ?

If you can prove there is no profit potential I will thank you for your insight and give up on this venture now.

Please tell me what basis there is for your statement

Much appreciated

Thanks

Well, I don't know exactly about luxury cars, but I have a couple of friends who had considered importing mid-range second hand cars (RMB100K~200K) from US/Japan, to China, but after adding up all the costs, duties, tax (calculated on the basis cost of the NEW car, and only God knows how they estimate that basis cost at the customs) and just the trouble and time for processing everything (residence permit required for ultimate owner) it was almost the same or even more expensive than the same model in China and simply not worth it. But maybe if you do it on a larger scale as a company terms are not the same so you might try as well.

If you are looking to do it within the letter of the law AND to do so profitably, forget about it.
If you have the cash to buy a 2006 Cayenne in Canada (you think you'll be able to legally export a car that has a lein on it?) then you certainly have the cash to do things like dip your toes into the real estate market/ start a small business over in China.

Hi Bitter Expat

The car wouldn't have a lein on it because it would already have been repossessed by the bank and then sold. Therefore that's not a problem

But it's slowly becoming clear that doing this legally is almost impossible.

As for real estate business. This is more of a long term investment. One can't exactly buy a house and sell it within weeks for a profit ? Furhter as far as I know a foreigner can only buy one house so that causes restrictions too.

What business are you in Bitter Expat ?

Build me a customized softtail, equipped with plates. Then, I'll be impressed .. as well as your 1st customer

eliteconsulting wrote:Hi Bitter Expat
The car wouldn't have a lein on it because it would already have been repossessed by the bank and then sold. Therefore that's not a problem

But it's slowly becoming clear that doing this legally is almost impossible.

Repo'd or not, you are not (legally) getting it onto the boat without proof of ownership. As in you paid cash for the car at auction. I'm going to assume you knew better than buying from a used car dealership

I know as a fact that cars are brought over from North America to Shanghai. Models that were never intended for sale in the Chinese market. I've even seen an Audi TT with dealer plates still on it parked in Hongqiao; the dealership was located a few miles from where I used to work in the USA. Somebody is bringing grey market cars into Shanghai; but the type of person with that sort of cash/ connections won't be asking for advice on a public web site.

eliteconsulting wrote:As for real estate business. This is more of a long term investment. One can't exactly buy a house and sell it within weeks for a profit ?

You are looking to make a quick profit? Good luck with that. I'm certain there are ample high profit / low risk opportunities in the current economic environment. Or was that vice-versa?

You can only buy one home... there are ways around this but that's a post for another thread.

eliteconsulting wrote:What business are you in Bitter Expat ?

I'm a corporate trainer! Which is a short way of saying that when I'm not getting drunk on overpriced beer/ ogling women young enough to be my favorite neices, I pretend to teach them English while they pretend to pay attention in class.

What a fancy title for an English teacher.

I'm a sanitation engineer.




(Garbage man)

I thought about doing this in china, but my wife said there is no point due to the costs. ALso, if you want to make big bucks, it would be best to sell big cars. Chinas all about big.