SHANGHAI (Reuters) -China’s commerce ministry will meet industry bodies and automakers including BYD and Dongfeng Motor to discuss increasing sales of “used cars” that were never driven, a person with direct knowledge of the matter said. The meeting is set for Tuesday afternoon, the person said, speaking on condition of anonymity as details of the meeting were confidential.
It comes after Great Wall Motor’s Chairman Wei Jianjun said in an interview with Sina Finance last week that a phenomenon called “secondhand cars with zero mileage” had emerged in the Chinese market as a result of the industry’s years-long price war.
The phenomenon, he said, involved cars that had been registered and had licence plates – marking them as sold – but had never been driven being sold in the secondhand market. Wei said that at least 3,000 to 4,000 vendors on Chinese used car platforms were selling such cars.
The source said the tactic was seen as a potential method within the industry for automakers and dealers to support new car sales as they try to meet aggressive sales targets.
Other participants invited to the meeting include the China Association of Automobile Manufacturers (CAAM), China Automobile Dealers Association (CADA), as well as some trading platforms of used cars, according to the person. The commerce ministry, BYD, Dongfeng Motor and CADA did not immediately respond to a request for comment. Great Wall and CAAM declined to comment.
Shares in Chinese automakers such BYD and Leapmotor extended losses after Reuters reported the meeting, with both falling 3.1%. Hong Kong’s Hang Seng Automobile Index fell more than 2%.
(Reporting by Shanghai and Beijing newsrooms; Editing by Clarence Fernandez and Kate Mayberry)
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