China’s Zero-Mileage SCANDAL Erupts!

China’s auto market is about to witness a drastic transformation, sparking intense chatter over its shocking policy shift, leaving many curious about the ultimate impact.

At a Glance

• China is considering a crackdown on “zero-mileage” used car sales, including a potential six-month resale embargo on newly registered vehicles.
• The practice has distorted market data, misled investors, and created problems for consumers.
• Authorities have pledged to rein in the “irrational” and cutthroat competition in the world’s largest auto market.
• Automakers like BYD and Chery are now under pressure to comply with the new push for market integrity.

A Crackdown on a Deceptive Practice

China, the world’s largest automotive market, is grappling with a self-inflicted crisis. After years of brutal price wars and chronic overcapacity, automakers and dealers have resorted to a deceptive practice: selling “zero-mileage used cars.” By registering and insuring new vehicles before they are sold to actual customers, companies can meet aggressive sales quotas and report inflated performance figures.

Now, the Chinese government is stepping in. According to an industry association publication, the Ministry of Industry and Information Technology (MIIT) is planning to crack down on the practice and is considering a ban on the resale of any vehicle within six months of its initial registration.

Inflated Numbers, Real Consequences

The issue gained national attention in May after Wei Jianjun, the CEO of Great Wall Motor, publicly criticized the scheme. His comments were followed by an editorial in the Communist Party’s People’s Daily newspaper condemning the practice. The government has since pledged to increase its supervision of the market to control “irrational” competition.

This isn’t just about skewed data. The practice creates real problems for consumers, who may purchase a “new” car only to find its insurance policy has already been active for months, leading to warranty and resale value issues. Automakers like BYD and Chery are now reportedly considering penalizing dealers who engage in these deceptive tactics.

A Reckoning for the World’s Largest Auto Market

If enacted, the new policy could help restore credibility to China’s auto sales data, which has been severely bruised by these practices. It would likely curtail the market’s chronic overproduction, forcing manufacturers to better align their output with actual consumer demand.

While some industry players may face short-term pain from no longer being able to game their sales numbers, the move signals a long-term commitment from Beijing to curb subsidy abuses, improve consumer protection, and foster a healthier, more honest auto industry.