(Yicai) June 11 -- The rapid rise of domestic new energy vehicles has transformed China's parallel-import vehicle market, leaving luxury imported models that once commanded markups of hundreds of thousands of yuan languishing in dealer inventories.

The downturn has been particularly visible at Tianjin Port, once China's largest parallel-import vehicle hub. The parallel-import market involves independent dealers importing genuine vehicles outside official manufacturer distribution networks, often offering lower prices and access to models unavailable through authorized channels. Annual imports there exceeded 130,000 units at the market's peak, but dealers now expect sales of just over 10,000 vehicles this year, about 90 percent below peak levels.

The decline reflects a broader contraction in China's imported vehicle market. Owners of two Tianjin-based import dealerships told Yicai that weakening demand and disruptions to international logistics have sharply reduced business volumes. The Tianjin Parallel Import Automobile Circulation Association stopped publicly releasing import statistics in 2024 amid the market slump. Its last published figures showed almost 45,920 declared parallel-import vehicles and sales of nearly 39,300 units in 2023.

The shift has coincided with the rapid adoption of domestic NEVs, which have increasingly replaced imported luxury vehicles as status symbols among Chinese consumers. Many former import dealers are now turning to vehicle exports, using overseas networks built during years in the import business to sell Chinese-made vehicles abroad.

Yicai recently visited Tianjin Port, where even Senyang International Automobile City, once the region's largest parallel-import vehicle trading center, is struggling to maintain operations.

Data from the China Passenger Car Association showed passenger vehicle imports fell 33 percent from a year earlier to 27,000 units in April. Luxury brands recorded even steeper declines. Audi's imports plunged 64 percent, Volvo's dropped 62 percent, and Porsche's fell 46 percent.

From Cash-Buying Mine Owners to Empty Showrooms

The market looks vastly different from before 2017, according to local dealers. At the time, Japanese sport utility vehicles such as the Toyota Land Cruiser Prado, Toyota Land Cruiser and Nissan Patrol were among the most sought-after imported models.

Most buyers came from resource-rich regions including Shanxi, Shaanxi and Inner Mongolia, one dealer said, recalling that many customers "showed up with millions of yuan in cash to place orders." The vehicles' durability and premium image made them especially popular among mine owners and other wealthy entrepreneurs.

One wholesaler said his largest deal involved purchasing 3,000 Toyota Land Cruiser Prado vehicles in Dubai and shipping them to Tianjin, where they were immediately resold at markups to dealers across China.

China's passenger vehicle imports began a prolonged decline in 2018, but many industry participants initially viewed the trend as a cyclical adjustment. "It was not until late 2023 that we clearly felt the whole industry was no longer doing well," said Zhang Fangcheng, head of Fangcheng Tianjin Automobile Sales and Service.

The wholesaler who previously sourced Toyota vehicles in Dubai said dealership closures accelerated and companies sharply reduced their workforces. His own firm's headcount has fallen from more than 300 employees at its peak to just over 30 today.

Former Importers Turn to Exporting Chinese Vehicles

Behind the decline of imported luxury vehicles is the rapid rise of domestic NEVs.

"Before 2023, friends around me were still asking how much a Land Cruiser cost at Tianjin Port. By the end of 2023, people were asking whether you had switched to an NEV," one industry participant told Yicai.

Consumer attitudes have also changed, according to another dealer. "Driving a Land Cruiser 5.7 used to be a status symbol. Today, driving a domestic NEV priced at several hundred thousand yuan doesn't feel any less prestigious than driving an imported vehicle priced at more than CNY1 million (USD147,651)."

Zhang said many of his friends and industry peers previously upgraded to increasingly expensive imported vehicles, but in recent years most have chosen domestic NEVs when replacing their cars. He himself purchased a domestic NEV SUV in 2023 and said many people around him followed suit.

Zhang added that a growing number of former parallel-import dealers have shifted into exporting Chinese-made vehicles to Central Asia, Russia, Africa, the Middle East and Southeast Asia. Distribution channels and business relationships developed during years in the import trade are now helping support the overseas expansion of Chinese automakers.

His company has already fully transitioned to exporting Chinese vehicles. Zhang said he hopes to use the connections and networks built over 15 years in the import business to contribute to the global expansion of China's auto industry.

For Tianjin Port, the shift may mark the beginning of a new chapter -- from a barometer of China's imported luxury vehicle market to a major gateway for Chinese vehicle exports.

Pointing to rows of Chinese-made vehicles awaiting shipment overseas, Zhang said: "Now it's their turn to head out to the world."

Editors: Tang Shihua, Emmi Laine