China Probes "Zero-Mileage Used Cars" Amid Auto Industry Price War

China’s commerce ministry is set to meet major automakers including BYD and Dongfeng Motor, alongside industry groups like the China Association of Automobile Manufacturers (CAAM) and China Automobile Dealers Association (CADA), to address concerns over the growing trend of “zero-mileage used cars,” according to a source familiar with the matter.

The meeting, scheduled for Tuesday afternoon, follows remarks by Great Wall Motor Chairman Wei Jianjun, who told Sina Finance that a large number of vehicles listed on used car platforms in China had technically never been driven. These vehicles, though registered and licensed, are being sold as secondhand to meet sales targets without actual end-user delivery.

Wei estimated 3,000 to 4,000 vendors are currently offering such cars, highlighting the consequences of prolonged price wars in China’s auto sector. This sales tactic is viewed by some industry players as a way to artificially boost new car sales figures while managing dealership inventories.

The commerce ministry aims to evaluate the impact of this practice on the broader automotive market and consumer trust, as well as explore potential regulatory actions. Trading platforms for used cars have also been invited to participate in the discussion.

News of the meeting prompted a sell-off in Chinese auto stocks. Shares of BYD and Leapmotor dropped 3.1%, while Hong Kong’s Hang Seng Automobile Index fell over 2%.

Neither the commerce ministry, BYD, Dongfeng Motor, nor CADA responded to requests for comment. Great Wall Motor and CAAM declined to comment on the issue.

The outcome of the meeting could shape future policy on how sales data is reported and influence the regulation of both new and used car markets in China.