China’s ruling Communist Party signalled a crackdown on the practice of selling new cars as second-hand vehicles at discounted prices, calling for stronger regulation to restore market order.
In an article published on Tuesday, the People’s Daily, the party’s official newspaper, criticized the so-called “zero-mileage used cars” strategy, where unsold new vehicles are registered as used to offer heavy discounts. The paper said the practice disrupts the auto market, distorts data, and damages fair competition.
The article follows public remarks by Great Wall Motor Chairman Wei Jianjun, who recently condemned the tactic, and a recent meeting between China’s Commerce Ministry and automakers to discuss the issue. The ministry has not issued a formal position, but the People’s Daily urged “tough regulatory action” and enforcement of competition rules.
The newspaper warned that the strategy may temporarily reduce inventory but leads to lower profit margins, greater losses, and reduced investment in innovation. It also cited risks for consumers, including the loss of first-owner benefits and weaker resale value due to depreciation and possible battery degradation.
The paper noted that electric vehicle makers especially should stop focusing solely on volume and data and shift toward improving quality and technology. The sale of zero-mileage used cars has been used by some automakers to manage high inventory levels, as demand slows and competition intensifies.
Price wars have become common in China’s car market, driven by overcapacity and weaker consumer demand. Deflationary pressure across the economy has also contributed to widespread price cuts in various sectors.
To address the issue, the People’s Daily proposed several measures: tightening registration oversight, introducing a vehicle tracking system, and preventing immediate resale after registration.
