How do newly opened superstores compare to mature ones in terms of ramp-up, revenue growth, and profitability?

John Lin detailed that the Xi'an superstore (opened Dec 2022) is profitable with a 25% local market share. Newer stores like Wuhan (opened Mar 2025) and Zhengzhou (opened Sep 2025) show significantly shorter ramp-up periods (1,000 units/month in 6 and 4 months, respectively) due to mature systems, standardized operations, and brand recognition. Profitability lags sales growth due to upfront investments but improves with scale. “The Wuhan superstore opened in March 2025 and its monthly retail transaction volume exceeded 1,000 units within about 6 months. The Zhengzhou superstore opened in September 2025 and its monthly retail transaction volume surpassed 1,000 units in about 4 months.”

What are the store opening plans for the year, and would the company consider slowing down if market conditions don't improve?

D.K. confirmed plans to open 4 to 6 new superstores in 2026, with Tianjin already open and projects in Chongqing, Sidedrong, Intra, Wuxi, and Guangzhou underway. He stated that short-term market volatility would not change the long-term expansion strategy, but the company would remain flexible and disciplined, potentially taking a more conservative approach to the pace of openings if conditions remain challenging, prioritizing cash efficiency and inventory turnover. “At this point, our plan to open 4 to 6 new superstores this year remains unchanged... We will continue to manage the rollout of each project based on market conditions and ensure that our expansion remains high quality and sustainable.”

Is there a similar trend of ICE vs. NEV divergence in the used car market as seen in new cars?

D.K. explained that while new NEV sales are strong, the used car market hasn't seen a meaningful increase in NEV share because NEVs are still less than 15% of total vehicle ownership. The used car market is driven by pricing, and current adjustments represent a 'one-time reset' in residual values for ICE vehicles, bringing them from 68-72% to 58-60% of new car prices, closer to mature market levels. This adjustment is expected to drive more trade-ins and used car purchases. “The residual value of a 3-year-old used vehicle in China measured against current new vehicle prices used to be around 68% to 70% -- 72%. Today, that figure has declined to roughly 58% to 60%, down 10 [ percentage ] bringing it much closer to levels seen in mature markets such as the United States, Europe and Japan.”

UXIN

Uxin (UXIN) Q1 FY26 earnings call: guidance and Q&A

Earnings call· Mar 2026 (Q1 FY26)· Industrials· Jun 16, 2026

Source: earnings call transcript

Executive summary

Uxin Q1 FY26 — Strong Retail Volume Growth Amidst Market Volatility

Uxin delivered robust retail transaction volume growth in Q1 FY26, driven by its scalable superstore model and expanding network. Despite significant market volatility and price adjustments in China's auto market, the company maintained strong inventory turnover and customer satisfaction. Management remains confident in its long-term expansion strategy, aiming for continued volume growth while navigating short-term margin pressures and expecting stabilization in the coming quarters.

Highlights

Retail transaction volume reached 16,530 units, representing a 119% year-over-year increase.
Achieved eighth consecutive quarter with retail transaction volume growth exceeding 110% year-over-year.
Maintained inventory turnover at approximately 30 days, demonstrating strong operational discipline.
Net Promoter Score improved to 68%, remaining above 65% and ranking among the highest in the industry.
Opened the Tianjin Superstore in March, expanding the nationwide network to six superstores and strengthening regional coverage.

Concerns

China's new vehicle sales declined by 20% year-over-year during the first five months of 2026.
Mainstream used ICE vehicle prices declined by 10% to 15% within 1-2 months starting April, creating profitability pressure.
Gross margin is expected to face greater pressure in Q2 FY26 due to rapid price adjustments in the new car market.
Adjusted EBITDA loss increased to RMB 34.3 million in Q1 FY26, up from RMB 27.2 million in the prior quarter.

Guidance & targets

Category	Target	Timeline	Confidence
Q2 FY26 Retail transaction volume	between 18,000 and 19,000 units high materiality	Q2 · FY26	High
Q2 FY26 Total revenue	between RMB 1.05 billion and RMB 1.1 billion high materiality	Q2 · FY26	High
Full-year 2026 retail transaction volume growth	more than 100% year-over-year growth high materiality	Full Year 2026 · FY26	High
New superstore openings	4 to 6 new superstores medium materiality	Full Year 2026 · FY26	High

UXIN operating KPIs by quarter

UXIN operating KPIs stated on its earnings calls, by fiscal quarter
KPI	This call Mar 2026 Q1 FY26	Jun 2026 Q2 FY26	Change vs prior quarter
Retail transaction volume	16.53K In the first quarter of 2026, our business continued its strong growth momentum despite the seasonal impact of the Chinese New Year holiday on used car sales, retail transaction volume reached 16,530 units, representing a 119% year-over-year increase. Source: earnings call transcript	19.61K Our retail transaction volume reached 19,610 units, up 89% year-over-year and 19% sequentially. Source: earnings call transcript	+18.6%
Average selling price Retail	61K CNY The average selling price or ASP of retail vehicles was RMB 61,000 compared with RMB 59,000 in the previous quarter and RMB 62,000 in the same period last year, remaining generally stable. Source: earnings call transcript	55K CNY The average selling price or ASP of our retail vehicles was RMB 55,000 compared with RMB 59,000 in the same period last year and RMB 61,000 last quarter. Source: earnings call transcript	-9.8%
Wholesale transaction volume	1,681 Our wholesale transaction volume was 1,681 units in the first quarter, representing a 134% year-over-year increase and a 32% decline sequentially. Source: earnings call transcript	2,289 Our wholesale transaction volume was 2,289 units in the second quarter, up 88% year-over-year and 36% sequentially. Source: earnings call transcript	+36.2%

Operating figures the company stated on at least two of the calls shown, checked against each call's transcript. Click a figure to read the sentence. A dash means it was not stated that quarter.

Deals & partnerships

Municipal government of Tianjin, Shojajan partnership

Strategic partnerships to jointly invest in and operate used car superstores.

Risks & headwinds

China auto market slowdown and price adjustments Since the beginning of 2026

New vehicle sales declined by 20% year-over-year during the first 5 months; prices of mainstream used ICE vehicles declined by 10% to 15% within 1 to 2 months starting April.

Mitigation:Disciplined inventory turnover, stringent quality control, superior customer service, flexibility in new store openings, prioritizing cash efficiency and inventory turnover.

Short-term pressure on profitability and gross margin Q2 FY26

Declining vehicle prices have created short-term pressure on profitability; gross margin will face greater pressure in the second quarter.

Mitigation:Prioritizing healthy inventory turnover over short-term gross margin optimization; expectation of stabilization and improvement in Q3 as new car prices stabilize and inventory clears.

Upfront investments in new superstores impacting profitability Q1 FY26 and early stages of new superstores

Adjusted EBITDA loss increased by roughly RMB 25 million YoY, primarily due to new superstores ramping up and upfront staffing investments.

Mitigation:Monitoring sales ramp-up, gross margins, inventory turnover, and store-level EBITDA to ensure high-quality and sustainable expansion.

Q&A highlights

What is the reason for the decline in used car prices in Q2, and how will this affect gross margin?

John Lin explained that a 35% drop in new ICE vehicle sales in April/May led to a 10-15% decline in used car prices. Gross margin will face pressure in Q2 as the company prioritizes inventory turnover. However, new car prices have stabilized in early June, and gross margin is expected to improve meaningfully in Q3, potentially returning to normal levels.

“As a result, gross margin will face greater pressure in the second quarter... However, based on what we have seen since early June, new car prices have generally stabilized... we expect gross margin to improve meaningfully in the third quarter and potentially return to normal levels.”

asked by Bin Wang · answered by Feng Lin

2 min read 5 chapters

Detailed narrative

China's Auto Market Dynamics and Used Car Resilience

The Chinese auto market experienced a significant slowdown in early 2026, with cumulative new vehicle sales declining 20% year-over-year in the first five months. New internal combustion engine (ICE) vehicle sales were particularly impacted, falling over 35% in April and May.

This led to rapid price adjustments in the used car market, with mainstream used ICE vehicle prices dropping 10-15% within 1-2 months. Despite these challenges, China's used car market achieved a modest 2% increase in transaction volume during the first five months, significantly outperforming the new vehicle market.

Superstore Model Validation and Scalability

Uxin's superstore model, characterized by disciplined inventory turnover, stringent quality control, and superior customer service, is proving resilient during market adjustments. The Xi'an Superstore, which opened in December 2022, has achieved profitability and a 25% local market share. Newer superstores in Wuhan and Zhengzhou demonstrate significantly shorter ramp-up periods, reaching 1,000 monthly retail transactions in 6 and 4 months respectively, highlighting the model's increasing scalability and replicability across diverse markets.

Strategic Expansion and Network Growth

The Tianjin Superstore, Uxin's first project in North China, officially commenced operations in March 2026, bringing the total number of nationwide superstores to six. The company has also announced strategic partnerships with local governments in Chongqing, Sidedrong, Intra, Wuxi, and Guangzhou for future superstore investments.

This ongoing expansion is designed to strengthen Uxin's service coverage, regional synergies, and brand influence, reinforcing its leadership in China's used car retail market.

Gross Margin Outlook and Stabilization Efforts

Gross margin remained relatively stable at 7% in Q1 FY26, with the larger sales contribution from mature superstores offsetting lower initial margins from new locations. However, Q2 is expected to face greater pressure due to the rapid price adjustments in the new car market impacting used car prices.

Management anticipates a meaningful improvement in gross margin in Q3, potentially returning to normal levels, as new car prices stabilize and existing inventory affected by earlier volatility is cleared.

Used Car Residual Values and Market Maturity

While new energy vehicle (NEV) retail penetration exceeded 60% in May, NEVs still account for less than 15% of total vehicle ownership, limiting their share in the used car market. The used car market is primarily driven by pricing, and current adjustments represent a 'one-time reset' in residual values for ICE vehicles.

The residual value of a 3-year-old used vehicle in China has declined from 68-72% to 58-60% of new vehicle prices, aligning with levels seen in more mature markets like the US and Europe.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.