Beijing: A growing number of local governments in China have adopted an unusual strategy to boost vehicle exports and domestic economic indicators by classifying brand-new cars as “used” and exporting them under that label. This controversial move, which has now caught international attention, is reshaping global auto trade dynamics and raising ethical and regulatory questions.

These so-called “zero-mileage used cars” are vehicles that have never been driven on public roads and are technically brand new. However, Chinese local authorities and automakers are registering them as used cars domestically and then immediately exporting them to foreign markets. The vehicles are usually registered for just one day long enough to technically qualify as “used” and are then sent abroad, often in bulk.

This clever bureaucratic workaround allows carmakers to report these vehicles as sold in China, boosting their domestic sales figures, even though the end users are overseas. The practice not only inflates sales data but also gives a false picture of consumer demand within China.

At least 20 provincial governments, including in regions like Guangdong, Sichuan, and Henan, are actively promoting this export model. Many local administrations are offering incentives to support it—ranging from building free warehousing facilities near ports and borders to organizing dedicated trade fairs and easing export documentation. This initiative aligns with their goals of economic growth and higher GDP figures, particularly in regions where the automotive sector plays a critical role.

For automakers, it’s a way to ease the pressure of unsold inventory amid slowing domestic demand and intense price competition. China’s automobile industry has been battling overcapacity, with many electric vehicle (EV) makers aggressively slashing prices to gain market share.

While this method might offer short-term relief, many experts and industry insiders are warning of long-term damage. Great Wall Motor’s chairman publicly criticized the practice, saying it compromises the trust and reputation of Chinese brands globally. Chinese state media, including People’s Daily, have also issued editorial warnings, calling for urgent reforms to regulate these pseudo-used car exports.

Foreign markets are taking note. Countries like Russia and Jordan have started tightening import regulations to block such zero-mileage used vehicles, viewing them as a form of dumping that distorts local markets and undercuts local dealers.

The Chinese central government has started taking action. In May 2025, the Ministry of Commerce summoned key automakers—including giants like BYD and Dongfeng Motor—to discuss concerns surrounding these misleading exports. Officials are reportedly considering stricter controls, such as tracking vehicle ownership more closely and imposing mandatory delays before export, to prevent immediate re-export after initial domestic registration.

In parallel, calls are growing for better transparency in vehicle life-cycle tracking, as well as for export data to reflect real international sales, rather than artificial figures generated for political or commercial gain.

This phenomenon of rebranding new cars as used for the sake of export figures is yet another example of China’s local policy experimentation backfiring on a global scale. While it offers a temporary boost to domestic sales statistics and local economies, it threatens to undermine the global perception of Chinese-made vehicles and the credibility of China’s auto trade data.

As international scrutiny intensifies and trade partners push back, the Chinese auto industry may soon have to confront the unintended consequences of this numbers game balancing short-term exports with long-term trust.