China’s Carmakers Caught in Scam Selling New Cars as Used

China’s car industry has been booming in recent years, especially with electric vehicles.

But behind the rapid growth, pressure is building. The market is overcrowded, and buyers are holding back.

Now, some carmakers are using creative tactics to survive—and it’s getting them into serious trouble.

The Chinese Communist Party is now criticizing car companies for selling new vehicles as used to get around rules, reports Boosted.

This is happening mainly with electric cars. The trick is simple. A brand-new vehicle gets registered once and then sold right away at a discount as “used.”

This allows carmakers to offer lower prices without officially cutting the price of new cars.

It also helps them reduce the massive stockpiles of unsold vehicles. But the government is not happy about it.

Communist Party Wants Action

The People’s Daily, a state-run newspaper and mouthpiece for the Communist Party, has called the practice outright fraud.

That kind of language is rare and shows that the leadership wants action.

The paper says this price-cutting tactic is hurting the market. It also claims that this behavior reflects a step backward for the Chinese auto industry.

It demands proper enforcement of the rules and says fake “used” cars should no longer be sold.

Criticism is also coming from within the car industry. Wei Jianjun, the chairman of Great Wall Motors, has openly condemned the sales trick.

A Weak Economy

His comments led the Ministry of Commerce to hold meetings with carmakers to deal with the issue.

The background to all of this is a weak economy. China is dealing with falling prices and slow demand.

Many companies are slashing prices to keep sales going. Car brands, already suffering from overproduction, are trying to offload stock by any means necessary.

But the party says the solution is short-term and harmful. Selling new cars as used lowers profits.

That means companies have less money to improve their products. Experts warn this could cause even more brands to collapse in the future.

For now, Western brands are feeling the most pressure. But Chinese companies are not safe either. One has already packed up and left its headquarters overnight.