In recent years, the Chinese automotive industry has been plagued by a serious issue of labeling a large number of “zero-mileage” new cars as second-hand vehicles and exporting them overseas. According to estimates from an industry insider, about 90% of the over 400,000 second-hand cars exported from China in 2024 were actually “zero-mileage” new cars.
This practice involves directly registering newly manufactured cars as second-hand vehicles, bypassing the initial use, and shipping them under the guise of second-hand cars to markets in Russia, Central Asia, and the Middle East. This strategy allows Chinese automakers to boost sales volume and get rid of unsold cars in the domestic market.
Sino Auto Insights founder Tu Le informed Reuters that this phenomenon is a result of a price war that has been ongoing for about four years, forcing companies to aggressively pursue any possible sales opportunities.
Since 2019, the Chinese government has officially permitted the export of second-hand cars to other countries. Chongqing-based used car dealer Huan Yu Auto began engaging in the trade of zero-mileage second-hand cars in 2022. The company’s International Marketing Director, Wu Weilin, mentioned that business was thriving in 2022 and 2023, with electric sedans bought for 40,000 yuan in China being sold for a profit of 10,000 yuan in Central Asia.
Wu Weilin from Huan Yu Auto noted that the competition in the car export industry has intensified, with many small businesses and even TikTok influencers entering the market, leading to diminishing profits for zero-mileage second-hand cars.
He remarked, “They used to sell vases, sell wine, and now they are selling cars in the same way. It’s getting chaotic out there.”
According to Wang Meng, a consultant for the China Automobile Dealers Association, thousands of traders are involved in disguising new cars as second-hand vehicles to meet export channel requirements. He disclosed that in 2024, China exported 436,000 second-hand passenger and commercial vehicles, with an estimated 90% of them being “zero-mileage” cars.
Data from the China Passenger Car Association revealed that in 2023, China surpassed Japan to become the world’s largest exporter of new cars, with a total of 6.41 million vehicles exported in 2024.
Based on Wang Meng’s estimates, about 6% of the exported cars were actually labeled as “zero-mileage” second-hand vehicles.
Local governments in China are actively supporting the export and sales of misrepresented second-hand cars, believing this is crucial for achieving the economic growth targets set by Beijing. As per Reuters, 20 provinces and municipalities (including major export centers like Guangdong and Sichuan) have expressed support for the export of zero-mileage second-hand cars in public government documents. This support includes issuing additional permits for such exports, expediting tax rebate applications, investing in export infrastructure, and funding promotional activities to encourage the practice.
For local governments, generating achievements through economic number games is paramount. Two executives in the Chinese automotive industry stated that since each car purchased and sold for export counts as two transactions, it can be recorded twice in the Gross Domestic Product (GDP) statistics, incentivizing local governments to attract these companies to operate within their jurisdictions to artificially boost GDP figures.
In a policy document released in October, Sichuan province announced plans to promote platforms like Alibaba International to create an “online export ecosystem for zero-mileage new energy vehicles.” Currently, 100 used car sellers from Sichuan are active on the platform.
The extensive export of Chinese new cars labeled as second-hand vehicles to overseas markets has heightened concerns about China subsidizing automobile exports abroad.
Due to severe overcapacity in the Chinese automotive industry, which has persisted due to allowing production to exceed demand, this situation not only triggered prolonged domestic price wars but also led to accusations of “dumping” domestically produced cars overseas.
Some countries are worried that the influx of Chinese cars may squeeze local dealerships and confuse consumers, prompting them to implement countermeasures. For instance, in 2023, Russia issued a government decree prohibiting brands such as Chery, Changan, and Geely from selling zero-mileage second-hand cars if they already have official dealerships in the country. The Commerce Bureau of Heihe City in China, located near the China-Russia border, stated on its website in November last year that this decree applied to certain Chinese brands.
Market supervisory authorities in other countries, including Jordan, are adjusting the definition of second-hand cars, requiring a longer period after registration or production before classifying vehicles as second-hand cars.