China investigates automakers for selling brand-new cars as used to inflate sales and obtain subsidies (X @BYDCompany)
In China, authorities are investigating a suspicious practice involving automakers such as BYD and Dongfeng. The strategy consists of registering brand-new cars as if they were used, and then selling them at lower prices.
Although the vehicles have never actually been used, they are registered as pre-owned so that manufacturers can artificially inflate their sales numbers, benefit from government subsidies — especially those intended for electric vehicles — and maintain a positive performance image in front of shareholders.
This scheme seems to benefit everyone involved: automakers increase their profits, dealers purchase new cars with resale margins, and consumers get virtually untouched vehicles at more affordable prices. However, the model directly depends on public incentives and, on a large scale, may represent misuse of these benefits, raising suspicions of fraud and threatening the sustainability of the sector — particularly the electric vehicle segment, which has grown thanks to support policies.
The alarm was fully raised after the CEO of Great Wall Motors compared the situation to the collapse of China’s real estate sector, citing the Evergrande group as a parallel. It is estimated that around 4,000 dealerships are involved in the practice. In response, the Chinese government summoned automakers, industry representatives, and digital platforms to clarify the impact of these actions on the automotive market.
Analysts fear that beyond distorting the market, these maneuvers reveal a saturated sector, where some companies are taking risks to avoid losing relevance — even at the cost of public trust and economic balance.
Source: InsideEVs | Photo: X @BYDCompany | This content was created with the help of AI and reviewed by the editorial team
