China has denied plans to ban the resale of new cars
Auto Review, the official publication of the Chinese Association of Automobile Manufacturers, has corrected its publication on the preparation of a ban on the resale of new cars within six months after the first registration. The editorial said that the original version contained "inaccurate wording" regarding China's Ministry of Industry and Information Technology (MIIT) and other agencies.
Here's What We Know
On Saturday, 19 July, Auto Review reported that Chinese authorities were going to ban the resale of so-called "zero" used cars - cars that had been registered but not actually used. However, on Monday Auto Review removed the paragraph and explained in a commentary for Reuters that the data was inaccurate. The updated version of the article said, "MIIT plans to work with other agencies to resolve the issue of zero used cars and control the problem at the source level."
The China Automobile Dealers Association's initiative has also been updated. Previously it was claimed that the organisation was proposing to introduce a coding system for used car exports, but now it only says it intends to "establish a relevant mechanism", with no details.
Other parts of the article, however, remain unchanged. In particular, Auto Review claims that Chery and BYD are going to tighten control over dealers and penalise them for violations - including cases where cars are registered before they are actually sold.
The practice of reselling "zero-mileage" cars has become a mass phenomenon in China amid fierce competition from manufacturers. To meet quarterly sales targets, dealers insure and register cars before they are actually sold. Such cars later appear on the aftermarket. Authorities have expressed their displeasure with the scheme: last week the Chinese government promised to fight "irrational competition" in the electric car market.
Source: Reuters
