China’s ‘dodgy’ car racket exposed

China’s booming car industry may not be all it seems with a new report revealing what’s really going on.

less than 2 min read

June 25, 2025 - 2:30PM

Motoring

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China’s auto industry is under scrutiny following reports that local automakers are exporting brand new cars as “used cars” to inflate domestic sales and increase GDP figures.

According to Reuters, vehicles with “zero-mileage”, cars that have never been driven by a customer, are being pre-registered in China and then exported overseas to locations such as Russia, Central Asia and the Middle East.

However, these “zero-mileage” vehicles are technically counted as sold in domestic figures once registered, even though they are immediately shipped out.

China’s vehicle production capacity has reached 55.5 million units annually - more than double its domestic demand.

Chinese-made cars are seen before being loaded onto a ship at the port in Lianyungang, in China’s eastern Jiangsu province on June 20, 2025. Picture: AFP / China OUT

The oversupply has prompted a price war among automakers and triggered efforts to clear excess stock.

The Reuters investigation claims that the government in China is aware and has supported these transactions.

Two Chinese auto executives said local governments encourage the practice to boost regional gross domestic product (GDP) because each transaction counts twice.

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An electric car of Chinese car manufacturer BYD stands in front of the car carrier ship BYD Explorer No. 1. Picture: FOCKE STRANGMANN / AFP

Documents seen by Reuters along with interviews indicate that vehicles are being exported under used-car export classifications despite them not being used cars.

Experts say that the dumping of these vehicles at low market prices could impact foreign markets and local industries.

The Chinese Ministry of Commerce and several automakers have not publicly commented on the report.

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