Uxin Q2 Earnings Call Highlights

Key Points

• Strong growth: Uxin’s second-quarter retail volume rose 89% year over year to 19,610 vehicles, while total revenue increased 75% to CNY1.151 billion.
• Margins came under pressure: Rapid declines in new gasoline-vehicle prices pushed gross margin to negative 0.7% from 7% in the prior quarter, resulting in a CNY120 million adjusted EBITDA loss as Uxin accelerated inventory sell-through.
• Recovery expected: Uxin targets 20,500–21,000 retail units and CNY1.16–1.19 billion in third-quarter revenue, with gross margin above 6%. Management also aims to sustain approximately 20-day inventory turnover to limit pricing risk and improve capital efficiency.

Uxin NASDAQ: UXIN reported second-quarter retail vehicle sales growth that outpaced China’s broader used-car market, while rapid price declines in new internal-combustion-engine vehicles pressured the company’s margins and prompted accelerated inventory sell-through.

Retail transaction volume reached 19,610 units for the quarter ended June 30, up 89% from a year earlier and 19% sequentially, according to Founder and CEO Kun Dai. Retail vehicle sales revenue totaled CNY1.08 billion, an increase of 78% year over year and about 7% from the prior quarter. Total revenue, including wholesale and other operations, was CNY1.151 billion, up 75% year over year and 7% sequentially.

Market Pressure Weighs on Vehicle Pricing

Dai said China’s automotive sector entered a period of accelerated consolidation in 2026. Domestic new passenger-vehicle sales declined more than 20% year over year in the second quarter, while internal-combustion-engine vehicle sales fell nearly 40%, according to management.

Used-car demand proved comparatively resilient during the quarter, with nationwide used-car transactions declining about 1.4% year over year, Dai said. However, the sharp decline in new-car prices, especially for gasoline-powered vehicles, flowed into the used-car market and affected the value of Uxin’s existing inventory.

Chief Financial Officer John Lin said the company’s retail average selling price fell to CNY55,000, compared with CNY59,000 a year earlier and CNY61,000 in the prior quarter. While lower vehicle prices reduced average selling prices, higher transaction volume offset part of that effect, he said.

Uxin’s wholesale volume was 2,289 units, up 88% year over year and 36% sequentially, producing wholesale revenue of CNY37.4 million.

Margin Declines as Uxin Clears Inventory

Uxin posted a gross margin of negative 0.7% in the second quarter, compared with 5.2% a year earlier and 7% in the first quarter. Lin attributed the decline to the rapid adjustment in auto prices and the company’s decision to accelerate the sale of vehicles affected by those price movements.

The company reported an adjusted EBITDA loss of CNY120 million, which Lin said primarily reflected the temporary pressure on gross margin. Sales and marketing expenses remained broadly stable despite expansion of the company’s business and superstore network, he added.

Management said the inventory reset is now largely complete. Uxin expects third-quarter gross margin to recover to above 6% as per-unit profitability improves and inventory turnover accelerates.

Dai said Uxin’s net promoter score remained at 68 during the quarter. He also pointed to continued investments in digital systems, including pricing, inspection, reconditioning, inventory management and customer relationship management tools.

• Second-quarter retail volume: 19,610 vehicles, up 89% year over year.
• Second-quarter total revenue: CNY1.151 billion, up 75% year over year.
• Second-quarter gross margin: negative 0.7%, versus 7% in the prior quarter.
• Second-quarter adjusted EBITDA loss: CNY120 million.

Faster Turnover Targeted as Long-Term Operating Model

Lin said inventory turnover was approximately 30 days in the second quarter, while the company has reduced turnover to about 20 days in recent months during the third quarter. Management attributed the improvement to AI-enabled tools used for pricing, price adjustments and risk alerts, as well as tighter integration across its operating systems.

According to Lin, faster turnover reduces exposure to vehicle price declines and inventory impairment risk. He said Uxin views turnover of about 20 days as a long-term operating target rather than a temporary defensive measure, and expects it to support greater capital efficiency and operating leverage without sacrificing per-unit profitability.

Dai said the company has validated its warehouse-style superstore model and plans to continue expanding its national footprint. Six new superstores in Yinchuan, Guangzhou, Wuxi, Chongqing, Shijiazhuang and Shaoxing are under development, while Uxin continues discussions with additional cities regarding new partnerships.

Third-Quarter Outlook and Financing Update

For the third quarter, Uxin expects retail transaction volume of 20,500 to 21,000 units, representing nearly 50% year-over-year growth. The company forecast total revenue of CNY1.16 billion to CNY1.19 billion and gross margin above 6%.

Management said it will maintain a cautious inventory procurement strategy given continued industry risks. Dai said nationwide used-car transactions fell 6% year over year in July and 11% in August, although management believes the most severe price adjustment occurred in the second quarter and conditions have begun to stabilize.

The company expects industry consolidation to continue. Dai said nearly 30,000 brick-and-mortar used-car dealerships exited the market in the first half, and Uxin estimates that 50,000 to 60,000 dealerships could leave the industry for the full year.

Separately, Lin said Uxin recently received $4 million in investment proceeds from NIO Capital. The remaining $4 million investment is proceeding as planned at $2.86 per American depositary share, while Joy Capital continues work on the overseas direct investment filing process for its investment.

Dai also said an entity he controls established a Rule 10b5-1 trading plan on June 30 to purchase up to $5 million of Uxin ADSs at no more than $2.85 per ADS. Following the required cooling-off period, purchases under the plan may begin Sept. 28 and would be carried out gradually, subject to the plan and market-volume constraints.

About Uxin (NASDAQ:UXIN)

Uxin Limited NASDAQ: UXIN is a China-based used automobile retailer and e-commerce company. The company operates an online platform that connects consumers with used vehicles and supports the purchase and sale of cars through digital tools and related transaction services.

Uxin's business activities have included vehicle sourcing, inspection and reconditioning, pricing information, online listings, sales assistance, and vehicle delivery. The company has also offered services designed to support used-car transactions, such as financing and other automotive-related solutions, subject to applicable regulations and market conditions.

Founded in 2015, Uxin initially developed as an online used-car marketplace before expanding toward an integrated retail model.

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