What Occurs When China Oversaturates the Market With New Cars Disguised as Old Models | Carscoops

      An expert claims that 90% of used cars exported from China last year were actually new, raising concerns about potential harm to the industry.

      Chinese automakers are reportedly exaggerating their sales figures by selling new cars as used ones. Many of the used vehicles exported in 2024 reportedly had no recorded mileage. Auto executives and party officials are divided on the long-term consequences of this approach.

      A recent report indicates that China's auto sector is artificially inflating its sales numbers and bypassing global trade rules by exporting new vehicles as zero-mileage "used" cars. Local governments, eager to meet Beijing's economic goals, appear to endorse this practice, while the Communist Party of China (CCP) denounces it.

      This strategy enables Chinese automakers to record sales, reduce domestic stock, and avoid trade restrictions simultaneously. The complications associated with selling new cars to regions like Russia, Central Asia, and the Middle East are circumvented by marketing them as "used."

      “This results from a nearly four-year price war that has made companies desperate for any sales,” mentioned Tu Le, founder of the consultancy Sino Auto Insights based in Michigan.

      An extensive Reuters report reveals more regarding this situation. Although the practice has existed for years, it wasn’t until May 2025 that a Chinese auto executive, Wei Jianjun, publicly expressed concerns. When asked why he complained about what seems like a lucrative opportunity, Jianjun warned that this could lead to a crisis in the industry.

      A Win-Win for All Involved

      Currently, exporters are obtaining new cars from automakers or dealers, registering them in China, and immediately categorizing them as used before exporting. This enables automakers to count the sales while exporters benefit greatly.

      “Due to these export firms buying and selling the same car, the transaction value is effectively doubled compared to standard new or used-car sales, prompting local governments to attract them to improve their GDP statistics rapidly,” Reuters reports.

      According to Wang Meng, a consultant for the China Automobile Dealers Association, "Of the 436,000 used passenger and commercial vehicles exported by China in 2024, 90% are estimated to be 'zero-mileage'." However, contention over this practice is brewing.

      A Brewing Civil Conflict?

      There appears to be a lack of consensus among Chinese government officials regarding this practice. Local governments support it, even establishing free storage facilities for zero-mileage used cars. In 2024, Shenzhen committed to growing its storage capacity for these vehicles to reach an annual target of 400,000. Other cities are increasing registrations beyond earlier limits to promote the practice.

      After Jianjun raised his concerns in May, another executive, Zhu Haurong, highlighted its potential for significant damage. Others also question the accuracy of sales figures across the Chinese auto sector. For instance, can we be certain that BYD is selling all the cars it claims? This loophole complicates verification.

      Following Jianjun's remarks, the People’s Daily condemned the practice, widely interpreted as a reflection of the views held by key political figures on the matter. It remains to be seen whether local governments will need to adjust their stance or if the CCP can be persuaded to permit the continuation of this practice.