China, the world’s largest auto market, is on the cusp of a major regulatory shake-up. The country’s Ministry of Industry and Information Technology (MIIT) has announced plans to ban the resale of vehicles within six months of initial registration. This unprecedented move directly targets so-called “zero-mileage” used cars: brand-new vehicles that are briefly registered—often by dealers or automakers—solely to inflate sales figures, only to be sold as used cars while never having left the lot.
The “Zero-Mileage” Tactic: Gaming the System
In recent years, China’s auto industry has faced a prolonged price war and fierce competition, resulting in chronic overcapacity. To maintain the appearance of robust demand, dealers and automakers have increasingly insured and registered new vehicles themselves. These “sales” enable companies to hit overly ambitious targets and gain access to government incentives. The vehicles, however, remain unsold in practical terms and are later quietly listed on the used car market as “zero-mileage” cars, typically at a discount to their original price.
This practice distorts real sales data, erodes consumer trust, and creates confusion for regulators and the public. Consumers, sometimes unwittingly, purchase “used” cars that are in fact untouched, yet miss out on benefits associated with first-hand ownership—such as certain warranties or government subsidies reserved for new car buyers.
The Policy Response: Details of the Ban
The new regulation, as revealed by an editorial from Auto Review (affiliated with the China Association of Automobile Manufacturers), explicitly prohibits the resale of vehicles within six months of initial registration. The China Automobile Dealers Association has further proposed a tracking system for used car exports to bolster transparency and enforcement.
Significantly, the planned rules are not just aimed at individual dealers but also at major automakers, including industry giants Chery and BYD. These companies are reportedly committed to holding their own dealer networks accountable for violations—such as registering cars before a real sale occurs—promising to discipline those that breach the new code.
Industry Reaction and the Road to Reform
The crackdown arrives in response to mounting criticism from both inside and outside the auto sector. The issue gained nationwide prominence after Great Wall Motor Chairman Wei Jianjun publicly denounced the zero-mileage practice in May 2025. His comments were quickly echoed by both state media and Communist Party publications, framing the tactic as emblematic of “irrational” competition that hinders the healthy development of China’s auto market.
This policy action is also part of a series of reforms to stabilize China’s turbulent auto sector, including pilot programs to encourage automobile consumption, subsidies for scrapping old cars, and a push for a more unified, efficient used car market. These reforms are designed to boost transparency, discourage overproduction, and support high-quality growth in a sector increasingly dominated by new energy vehicles (NEVs) and electric vehicle (EV) makers.
Implications for Automakers, Dealers, and Consumers
Manufacturers and Dealers: Automakers must monitor dealer compliance closely, or risk facing significant penalties and reputational damage. Some, like BYD and Chery, have already been embroiled in recent scandals over improper subsidy claims and are under additional scrutiny.
Market Dynamics: The ban is expected to curb the artificial inflation of sales and level the playing field among competitors, particularly benefiting brands with transparent and ethical sales practices.
Consumers: Buyers stand to benefit from greater clarity around the history and status of vehicles on the market. By removing the loophole of “zero-mileage” cars, the government hopes to restore trust and simplify the purchasing process.
Looking Ahead: A New Era in China’s Auto Market
China’s determination to root out zero-mileage car sales signals a new maturity in its approach to market regulation. As the global auto industry transitions towards electrification and higher standards of transparency, China’s latest initiative demonstrates a willingness to confront entrenched interests for the sake of long-term stability and consumer rights.
The coming months will test the rigor of enforcement and the auto sector’s willingness to adapt. If successful, the ban could become a blueprint for emerging markets grappling with similar challenges, further cementing China’s role as a bellwether for global automotive policy.