Competition in China's car market has led to the emergence of "zero mileage" used cars
Chinese carmakers like to pepper each other with incredible sales figures for new models in the first few days after unveiling them, but this information should be taken with caution. China's Ministry of Commerce will meet with automakers including BYD and Dongfeng Motor, as well as industry associations, on Tuesday to discuss the growth in sales of so-called "zero-mileage" used cars. This was disclosed to Reuters by a knowledgeable source who wished to remain anonymous due to the confidentiality of the discussions.
Here's What We Know
The meeting was prompted by recent statements by Great Wall Motor's head Wei Jianjun. In an interview with Sina Finance, he spoke about a unique phenomenon in the Chinese car market - the sale of cars that have been registered and given licence plates, but have never actually been used. Such cars are considered formally sold, but then appear on the secondary market as "used" even though they have zero mileage.
According to Wei, at least 3,000 to 4,000 sellers of such cars are now operating on used car platforms in China.
A Reuters source said such practices are used by carmakers and dealers to artificially inflate statistics on new car sales volumes. The goal is to achieve "aggressive" targets amid a years-long price war in the industry.
Representatives from the China Association of Automobile Manufacturers (CAAM), China Automobile Dealers Association (CADA), a number of online used car sales platforms have also been invited to the meeting.
BYD, Dongfeng Motor, China's Ministry of Commerce and CADA did not promptly comment on the situation. Great Wall Motor and CAAM declined to comment.
Source: Reuters
