China plans to ban new cars from being resold within six months after registration

 

China’s Ministry of Industry and Information Technology is planning a significant policy change that will prohibit the resale of new cars within six months after their registration. This development was reported by Auto Review, a publication operated by the China Association of Automobile Manufacturers. The regulation is aimed at curbing the increasingly common practice of selling “zero-mileage” used cars vehicles that have been registered but not actually driven. This new rule is intended to clean up distortions in the auto market, where some dealers or speculators register new vehicles and then quickly resell them at inflated prices. These resold cars technically qualify as "used" but have barely been driven, creating confusion and undermining consumer trust. The editorial also highlights that Chery and BYD, two of China’s leading car manufacturers, are preparing to take strict measures. These companies reportedly plan to hold their dealers accountable for manipulating sales figures or violating future resale restrictions. Some dealers allegedly register vehicles in advance to meet sales quotas, then try to sell them as used but new-condition cars. While the government hasn't yet officially announced the ban, the report signals a serious shift in how the Chinese auto industry is regulated. It could affect everything from dealer operations to car export procedures, and represents a broader push for transparency and fairness in the domestic vehicle market.

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Alongside the resale restriction plan, the Auto Review editorial noted that the China Automobile Dealers Association (CADA) has proposed introducing a code-based system for used car exports. This is aimed at increasing traceability and regulatory control over vehicles that are exported after being resold. If adopted, such a system would help differentiate between truly used cars and vehicles resold shortly after registration without actual usage. The crackdown targets the grey area in car sales where vehicles are licensed but not driven, then resold either within China or sent abroad. This loophole has allowed some businesses to circumvent official regulations or gain an unfair market edge. The six-month rule would disrupt this practice and prevent short-term speculation. Companies like BYD and Chery are at the forefront of this movement, reportedly introducing new internal policies to enforce accountability among their dealer networks. Dealers caught violating the proposed rules such as by pre-registering unsold vehicles or exporting cars under false categories may face penalties or termination of contracts. If implemented, this policy could have several implications: 1. It may increase the reliability of used car listings, helping consumers feel more confident in what they’re buying. 2. It could also tighten control over China’s fast-growing used car export market, aligning it more closely with international norms. 3. For automakers, it might mean better tracking of true sales performance, not inflated numbers due to artificial pre-registration. Overall, this move reflects China’s broader effort to stabilize its car market, improve transparency, and standardize vehicle sales and exports. While the policy is still in the planning stage, its ripple effects could be felt across the global automotive trade.

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