China’s commerce ministry will meet with automakers, including BYD and Dongfeng Motor, on May 27, 2025 afternoon to discuss the sale of “secondhand cars” that have never been driven, according to a confidential source.

These “secondhand cars with zero mileage” are vehicles registered and sold with license plates but remain unused, a trend linked to price wars in China’s auto market by Great Wall Motor’s Chairman Wei Jianjun.

He mentioned that thousands of these vehicles are listed on Chinese used car platforms.

The practice may be used by automakers and dealers to artificially boost new car sales figures and meet tough sales targets, the source said, with the meeting also involving industry groups and used car platforms.

After news of the meeting, shares in automakers including BYD and Leapmotor fell over 3%.

🔗 Source: Reuters

🧠 Food for thought

1️⃣ China’s zero-mileage car phenomenon reveals deep market distortions

The emergence of “zero-mileage used cars” represents a significant market distortion in China’s automotive industry that goes beyond typical inventory management tactics.

With approximately 3,000-4,000 vendors selling these registered but never-driven vehicles on Chinese platforms 1, the practice reveals how manufacturers are struggling to balance aggressive sales targets with actual consumer demand.

This phenomenon reflects challenges seen in other maturing automotive markets, where price wars often lead to unusual sales tactics when growth slows after years of expansion.

The fact that China’s commerce ministry is directly intervening by summoning major manufacturers like BYD and Dongfeng 1 signals serious regulatory concern about market transparency and consumer protection.

Chinese automakers’ stock prices dropped immediately following news of the regulatory meeting, with both BYD and Leapmotor falling 3.1% 1, demonstrating investor sensitivity to potential regulatory actions in this area.

2️⃣ Vehicle depreciation patterns explain the zero-mileage strategy

The zero-mileage car phenomenon takes advantage of a market inefficiency: vehicles typically lose 15% of their value when moving from the 0-10,000 km to 10,000-20,000 km mileage bracket 2.

By registering vehicles as “used” without actually driving them, dealers can potentially avoid the steepest depreciation curve while technically fulfilling new car sales targets.