As China's automobile industry thrives, the concept of commercial vehicle is more and more familiar to the locals.

The revised ISO3833 shows that future international standards will only be divided into two categories: passenger vehicles and commercial vehicles. Commercial vehicles are designed and characterized to carry people and merchandises.

In terms of market size, the second-hand car trading volume in China has been increasing in recent years, especially the proportion of second-hand commercial vehicles in the whole trading volume has been expanding.

Statistics from the China Association of Automobile Manufacturers shows that the volume of second-hand commercial vehicles in China exceeded 2.6 million, while the number of commercial vehicles sold in China was 4.37 million in 2018.

It is said that the second-hand car trading volume in developed countries is twice the new car sales volume and the export of second-hand cars is more than 10% of the trading volume. Compared with developed countries, China's second-hand commercial vehicle market, which is still in the early stage, has great potential for development.

It's Difficult to Evaluate Commercial Vehicle Performance

Compared with second-hand passenger vehicles, the evaluation of second-hand commercial vehicles is difficult mainly because of the numerous and complex models.

There are as many as 50,000 vehicle models in circulation on the market at present, and there are more than 400 parameters and configurations. If only relying on human labour to evaluate the vehicle, it will not only lead to huge operating costs caused by labour redundancy but also difficult to ensure the accuracy of its evaluation.

The parameters of commercial vehicles are several times more complex than passenger vehicles. As an operating tool, commercial vehicles are rarely idle. The actual use of the environment is different,  it is even more difficult to eliminate users of the car condition, after-sales, maintenance and other aspects of worry.

Some media reports said that the United States has been implementing a "certified used car" system since the 1980s, in which dealers certify their used cars to ensure their reliability. Collect vehicle information from the main engine plant, traffic management department, insurance institution, financial service company and other channels through professional institutions, form vehicle condition transaction records, and make comprehensive certification endorsement for vehicle condition. However, this certification system is still blank in China.

In addition, the second-hand commercial vehicle market is still in a chaotic stage. The contradiction between market irregularities and huge demand has driven up the second-hand commercial vehicle trading chain, and the cost added by various intermediate channels account for at least 20 percent of the actual transaction price.

About Lionbridge

In fact, the biggest fading effect on the rapid development of the second-hand commercial vehicle market is vehicle assessment. Even so, the monthly turnover on second-hand commercial vehicle trading platforms can still exceed CNY 100 million (USD 14.48 million).

Lionbridge is a Chinese commercial vehicle service platform and founded in April 2012. Its business scope covers more than 700 county-level cities in 30 provinces and administrative regions.

In terms of financing, in September 2014, the company get money from Bain Capital (贝恩资本), a well-known American private equity fund, as its controlling shareholder. In June 2018, It was jointly invested by Baidu and Riverhead Capital Investment (阳光融汇资本). In January 2019, Lionbridge obtained equity financing from China Merchants Group, a state-owned enterprise.

Lionbridge has launched an App-based auction platform. "Unlike ordinary passenger vehicles, 90 percent of second-hand commercial vehicle drivers come from rural areas and it is difficult to get in touch with them, so the auction platform is mainly aimed at dealers, " Zhang Zhuoran (张卓冉), General manager of second-hand commercial vehicle department of Lionbridge, told EqualOcean.

Currently, there are more than 100 professional appraisers on the platform, and more than 2,000 vehicles are tested every month. " This would be an 'impossible task' without '火眼 360'." Zhang told EqualOcean that '火眼360' could take photos or videos of 108 key core parts, upload parameters and indicators, and form a preliminary judgment of vehicle conditions after re-inspection and confirmation.

"There are very strict requirements about which key parts have to be photographed, which parts have to be photographed video, which Angle it has to be, how many pixels it has to have, and so on, " said Zhang Zhuoran.

Lionbridge said that AI, based on deep learning and big data has played a big role in the pricing of second-hand commercial vehicles.

The data of the valuation model come from the vehicle sales data of the whole network, the sales data of the national dealers, GPS data, the accident record data and the historical transaction data of Lionbridge.

Through the cleaning, comparison and analysis of these data, the company has set up a commercial vehicle model library, which is the most complete and detailed commercial vehicle model library in China. Lionbridge also built a second-hand commercial vehicle valuation model by integrating the current market price method, replacement cost method and machine learning algorithm, which can quickly realize the accurate assessment and pricing of the residual value of second-hand commercial vehicles.

"The development of used cars needs to overcome many obstacles, but this is how we're going to get into this new ‘blue ocean’," said Zhang zhuoran.