China’s exports of ‘used’ cars with zero mileage circumvents trade regulations and tariffs, which may lead to trade friction, experts say.
The Chinese regime has been exporting new cars as “used” to absorb the auto industry’s overcapacity amid low domestic demand and increased tariffs, raising renewed concerns of dumping.
A large number of “zero-mileage” new cars are marked as used and sold both domestically and abroad in recent years, according to Chinese and international media reports.
Almost all major Chinese auto makers are doing it, including Li Auto, whose CEO admitted to the practice in a Chinese media report.
Auto companies and dealers register and license new cars, include them in the “sold” data, and then sell them at low prices through second-hand car dealers. This operation allows car companies to quickly deal with overstocked inventory and recover funds. It also creates a false impression of a robust market.
In 2024, China exported 436,000 used passenger cars and commercial vehicles, including electric vehicles, according to the China Automobile Dealers Association (CADA).
CADA consultant Wang Meng estimated that 90 percent of them were zero-mileage cars.
Sun Kuo-hsiang, a professor of international affairs and business at Nanhua University in Taiwan, said the practice is “disguised dumping.”
It will “impact the official sales and pricing system of Chinese auto brands overseas, damaging brand image and value,” he told The Epoch Times on June 26.
According to mainland Chinese media reports, many Chinese car dealers sell zero-mileage cars as used cars overseas to enjoy both the export tax rebate for used cars while avoiding domestic tax costs.
China’s sluggish economy and weak domestic consumption have put further pressure on Chinese auto makers, especially electric vehicle (EV) makers, which have already been struggling with overcapacity.
In order to absorb the overcapacity, China’s auto exports have increased significantly in the past five years. Cheap Chinese EVs and hybrid cars have been flowing to Europe, Southeast Asia, and Latin America, putting pressure on those country’s domestic auto industries and caused dumping concerns.
In response, the United States has imposed 100 percent tariffs on EVs imported from China. To protect its domestic industry, the European Union raised tariffs on China’s EVs to 45 percent.
However, used car exports are less impacted by the raised tariffs.
By Alex Wu
