Good day, and welcome to Q3 Investor Summit Virtual. We appreciate your participation in today's virtual event. Up next, we are pleased to introduce Uxin Limited. If you would like to ask a question during the webcast, you may drop them in the chat box button on the left side of your screen. Please type your question into the box and click "Send" to submit it. At this time, it is my pleasure to hand over the session to John Lin , CFO at Uxin Limited, who will lead the presentation. Sir, the floor is yours.
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Thank you, everyone, for joining today. My name is John Lin . I'm the CFO of Uxin Group, and I've been in this company for six years. I'm very glad today to have a chance to share with you some amazing work we have done in the Chinese used car business. Ever since the first day of our founding, we are aiming to lead the industry revolution of the Chinese used car market. Our goal is to become the world's largest and the most trusted used car retailer. We believe only the U.S. and China can have a company that becomes the largest used car retailer. Uxin, so far, as far as I know, is the only company in China that is doing used car retail business in a super large scale and has the operational and technical capability to expand across China. Let me first start with the overall market.
China now has 315 million cars and has the world's largest total vehicle ownership. It's very similar to the U.S. China is already a country on wheels. However, when it comes to the retail car business, China is far from mature compared to the U.S. In the United States, the annual used car transaction is about 2.3x the new car sales, while in China, the annual used car transaction is only 60% of its new car sales. If we believe that China's market follows the trajectory similar to the U.S., then China's used car business has at least a four to five times growth potential. In the past 10 years, the annual growth rate is about 11%, and we believe in the next five to 10 years, we will continue its growth at a similar rate. In 2030, it will reach around 35 million units annual sales.
It will be very similar to what the U.S. market size is right now. How is business running in China? It's extremely fragmented. About 95% of the transactions are done from very small dealers with inventory levels from 10 - 20 units. The small dealers gather together in a scenario called the used car marketplace, as shown on the left side of the picture of this slide. This is a picture of a very traditional used car marketplace, and there are thousands of marketplaces like this in China. It may have 1,000 - 2,000 units at the same site, spread among 100 - 200 very small dealers. The environment is very messy, disordered, and not well maintained.
If you want to, say, if you're looking for a BMW 3 car, then you need to go to every corner of the marketplace, talking to people, checking the car, just negotiating about prices. At the end of the day, you don't have a full confidence that you can choose an ideal car, a trusted car. We call this stage still a bazaar market. We think the used car is a retail product, so its evolution follows the retail product's upgrade path. One way for the industry to evolve is going online, right? Like you are buying something from Amazon, or you are selling, or you can buy used cars online, like Carvana's business in the United States. Another way of upgrade is transforming offline from a bazaar market to a supermarket and eventually a warehouse superstore model similar to Costco, Sam's Club, and/or CarMax in the States.
We are actually running both offline superstores, but our size is much bigger than CarMax. Every store has a capacity of over 3,000 units, and at the same time, every car is selling online as well. We are doing both offline and online business, used car retail business, like a combination of CarMax and Carvana. This is our flagship store. Superstore is the largest one. It has 450,000 m^2 , about maybe 65 football fields, the size of the size. It can display up to 10,000 cars at the same time. Every superstore has a reconditioning factory, and its production capacity is about 100,000 cars a year, which is actually matching our sales room display capacity. I think when it reaches its full capacity, it is the world's largest warehouse-style superstore.
We also believe that our factory, reconditioning factory, is actually the world's most advanced used car inspection and the reconditioning factory. This is our Xi'an superstore, which is smaller, but it's actually our standard model for nationwide expansion. It's the region's most advanced. It has the region's most advanced reconditioning factory, and it's also the regional largest warehouse-style superstore. It can hold up to 3,000 cars. The sales turnover of this store is less than 30 days, which means if it displays 3,000 cars at the same time, it sells 3,000 cars within a month as well. Before 2025, we only have Hefei and Xi'an, the two stores. Starting from this year, 2025, we are actually starting nationwide expansion. This is our first store opened this year, which was in March. It's the Wuhan superstore. As you can see, it also can display 3,000 cars.
Actually, it can display more than that. It's very similar to our Xi'an superstore. It's been open six months, and this business is doing fairly well. It now sells about 1,500 cars a month. Its inventory is still increasing, and the monthly sales volume is still ramping up. This year, we are planning actually to open another two superstores, one in Zhengzhou, one in Jinan, the two capital cities of two of the most, or two of the provinces which have the most population in China. For areas, for cities that we don't have an offline superstore, actually, people say in Beijing, Shanghai, Shenzhen, they can buy the same car via our application, our online shopping mall. Every car of our inventory is listed both offline and online. The same car, same price.
People can just browse the web, browse our app, and check the report of the cars, talking to our sales representatives, place orders, and buy the value-added services. They just need to pay shipping, which is around $150 - $300, and then we deliver it to our customer store. I'll just share our business model and our model compared to our competitors, which is actually the very small used car dealers. I'd say, as I said, 95% of the used cars are sold through those very small dealers with 10 - 20 inventory units. Our advantages versus them are overwhelming, actually. First, our experience, shopping experiences, well, if you visited the marketplaces and our superstore, it's totally sky and land. It's sky and earth. We have unparalleled shopping experience.
The second one is our world's most advanced reconditioning factory guarantees the best quality in China, and our operational efficiency and cost level is also the best in China. The third advantage is our whole operation is standardized, digital, data-driven. This is super important because this is the foundation for cross-region expansion. As you know, the used car is a non-standard product. To run a business selling non-standard products across different regions, it's very difficult. Standardization is the foundation for nationwide replication expansion. The last, the fourth advantage is we may be the only used car retailer in China that can use the inventory financing. This gives us a financial leverage, so our cash return, capital return, is much higher than those small dealers. I will show you more in detail from the next page. This is a slide showing our shopping experience.
When the first time the customer comes to our store, the first sight they see, they see us. We intentionally design an experience of credit enhancing. In China, the biggest pain point is not, it's the trust issue. The customer wants to buy a used car, but they are not confident of buying a good quality car. The first sight they see us, we are big, we are just there, and they know we cannot run away. When they enter our room, look at our showroom, it's clean and tidy. Even our toilet is clean. It's with the very similar standard as Costco. You know what? Our Hefei store, the designer, is actually the designer of Costco's global stores, globally, the MG2. We learned a lot from Costco's philosophy, actually. Our showroom, you can easily find the car you want, and our sales representatives are very professional and welcome.
After you make your choice, you place your order on the app, in the app, and you wait, relax, buy coffee at our customer services area. At the same time, you can shop our value-added services like finance, insurance, accessories, warranty, etc. We also have a DMV on site, so you can transfer your title on the same day. From end to end, it's a one-stop, hassle-free shopping experience. As I said, since we are the largest used car retailer in the region, and our shopping experience is overwhelming, we also have the number one customer reputation in the areas we have, we opened the superstore. We can easily, we actually, we easily became the used car buying destination for customers in that region. What does that mean? We actually tracked the sales behavior of the customers within three months from their first visit at our superstore.
About 40% - 50% of them, they buy from us. They buy from us. About 30%, they purchase new cars. About 25% of the customers, they didn't buy any car, and only less than 5% of the customers, they buy from other small dealers. We welcome the customers to compare, to go around, shop around, and then 40% - 50% will come back to us. What does it mean? As long as customers want to visit us, they know us, that we win, we will win like 40% - 50%. The high sales conversion also leads to high sales turnover. In China, the average sales turnover days for small dealers is average, which is publicly shared every month from the bureau government agency. It's around 55 - 60 days.
The average sales turnover for Uxin, we started in 2022 during the COVID time, was 60 days, and now we are actually less than 30 days, around 30 days. New stores, like in Wuhan superstore, have 30 days sales turnover, and for Xi'an, Hefei actually less than that already. Also, for the revenue generation capabilities, for traditional small dealers, they only earn money from two parts. One is from price spread, one is from financing, which means they have channel refund if they sell a used car loan. For Uxin, we earn from two parts. One, of course, price spread, but for value-added services, we can earn money from logistics, financing, insurance, accessories, extended warranty, maintenance, repairs. We have many more sources of revenue compared to those small dealers because we have a big location. We have the best factory, so the customers trust us.
They buy those services, and they get their services done from us as well. We have much bigger sales revenue potential compared to those small dealers. For our reconditioning factory, we say we are the world's most advanced one. We have a lot of system design behind us, and it employs a lot of cutting-edge technologies. For example, if a windshield is cracked by a stone, we can fix that. The cost of fixing that is around $10. If an opening buckle of a glove box of BMW is broken, then we use 3D printing to make one, which costs about $1. If you replace the whole hand glove, it costs you maybe $300. We have very technical or the best smart repair technologies that can give us a lot of advantages in cost.
If we buy a car like this from a customer, we can easily lower the price, the acquisition price by, say, $500, but we fix it maybe in $10, something like that. Every car can be reconditioned to the standards like shown on the right-hand side. This is very important for our factory's operational efficiency. The days of used car from acquisition to listing, when they enter the factory and get out of the factory for listing, without the factory, it took us almost two weeks in 2021. Now it's less than three days. Okay, and the rest for the same quality reconditioning, I think in the U.S., our counterparties is definitely more than $1,500. I think it's become much more, I expect in maybe this year due to inflation in the past years. For us, we're doing in-house $150. Okay, that's the cost advantage we have.
For our third advantage, is our digital standardized process. I don't want to talk more about this, but we just want to say running used car business is very complicated since they are all non-standard goods. Every car is different. It's a complicated process. Only if a company has a standardized process, a digital-driven, that company can replicate business all over China. In China, Uxin is the only company, I think, that is technically having this capability. For our AI power, we have a very nice AI-powered pricing system. Why data is important in used car business? Because that gives us the economy of scale advantage. For example, what's the most precious data in this field is actually a car. How much is a car actually sold of the similar configuration? How much was it really sold in the past months?
Only if you have the car, you sold it, you know the true price. You can never get it outside. The more data we have, the more accuracy we do our pricing, and they give us a lot of advantage. Last but not least, we are the only, we may be the only retailer in China to leverage inventory financing. Our cash return of a mature stage superstore is more than 150%. For us, very traditional small dealer, I think 15%- 20%. We have a huge advantage. What's the financial outcome? From quarter two, 2024, we started to ramp up our inventory. At the top left, sales growth shows that. In 2024, our retail growth, annual growth, is year -over -year 134% increase. Our guidance for 2025 is retail growth will be over 100%. In the first quarter, we were actually 140% year -over -year growth.
From what we see in the past months, the similar trend will continue. About our profitability, our adjusted EBITDA, we achieved the first possible adjusted EBITDA in Q4 2024. Our guidance for this year is we want to achieve adjusted EBITDA break-even. We are trying our best to make that. For expansion potentials, I think there are at least 100- 200 cities. We have at least 100 cities we can open 2,000 units superstore. Another 100 cities we can open like 1,000 units inventory or even higher. Okay, we plan to, for the top 20 cities in China by vehicle ownership, enter five of them by the end of 2025. In the next three years, by 2027, we plan to enter at least 15 of them. Our plan is to achieve 50 superstores in 2030, which is on this page.
We plan to open four to 10 stores every year. By 2030, 50 superstores with 1.5 million units annual sale, annual retail volume, and achieve $15+ billion sales revenue. We hope by 2035, we will open 150 more because our store opening speed will be accelerating. As long as we have more stores, it'll be much, much easier for opening new stores. That's pretty much what we have for today. Thanks for listening. Now we have some questions, Q&A session. We have some questions first from Mike. Where do you see our business gaining in three years? I shared, in this page already, right? You can learn, I said, 50 superstores by 2030 and 1.5 million units sold annually. Major competitors, frankly speaking, Uxin is the only company used car retailer in China that's seriously doing retailing business in a large scale. Right now, we don't see any competitors.
Actually, our competitors are the very small dealers that's accounting for 95% of China's overall sales, with inventories 10 - 20. We don't see major competitors right now. That's my answer. Second question from Jonah. We highlighted Uxin 's AI-powered dynamic pricing system. How sustainable are these technology advantages and how difficult would they be? Our pricing system is very unique in China. We actually are an industry leader when it comes to user data technology, used car retail, and pricing. What sets us apart is the system improves as we sell more and more as we scale. We actually will have the, say, we will sell, say, 50,000 units this year, probably double next year, or continuously double the sales the year after. The more data we have, the more accurate pricing we will have. It will also facilitate us in nationwide expansion.
I think it's very hard to replicate without scale because, as I said, the most precious data is the real transaction price. Only if you sell it, you know it. As to our understanding, the traditional dealers with small inventories, they probably would not have volume to build comparable data sets. I think our AI-powered dynamic pricing system will have the advantage of the world. It's actually very obvious. The third question, that we have like 100- 200 cities in China suitable for rollout and what criteria we have. This is a very quick one. Actually, it's easy. We prioritize cities based on three key factors: the vehicle ownership, used car transaction volume, and transportation infrastructure. For example, Wuhan City, the one we opened in March, has 5 million vehicles ownership and a strong automotive ecosystem.
Just after five months after opening, our monthly sales already exceeded like 1,200 units, and it will probably be 1,500 units this month. That's our standards for choosing the cities to open superstores. Are we at timeout? That's pretty much what we have for today. We don't see many, I don't have any other questions. Thanks.
John, can you hear me?
Yeah, I can hear you. I'm sorry, your voice is a bit low, so I cannot hear clear. Sorry, I cannot hear you clearly. Sorry, your voice is very low. I really cannot hear you clearly.
Okay, that concludes Uxin Limited's presentation. We will now disconnect. For details on upcoming presentations, please refer to the conference agenda. Thank you for your participation, and we look forward to welcoming you to the next.