China cracks down on “zero-mileage” auto exports used to inflate sales and claim tax perks | investingLive

China has introduced new rules to curb the export of “zero-mileage” vehicles — brand-new cars registered as used — in a bid to stop automakers overstating sales and claiming tax benefits tied to inflated export volumes. The practice has drawn scrutiny as China becomes the world’s largest car exporter, with domestic manufacturers grappling with intense competition and excess inventory at home.

The regulations, published by the Commerce Ministry, apply to any vehicle exported within 180 days of registration. Authorities say the loophole has distorted industry data by making it appear that surplus stock is being sold overseas, while many buyers later discover they are unable to access after-sales support or spare parts, harming the reputation of Chinese brands abroad.

The crackdown targets falsified registrations, doctored export paperwork and violations of both Chinese and foreign import regulations. Starting January 1, manufacturers will be required to provide formal guarantees of after-sales service and disclose where customers can obtain repairs.

The ministry did not identify specific companies, though reports of the practice span multiple provinces.

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The new rules may slow China’s export surge in early 2026 and pressure automakers relying on overseas markets to absorb excess domestic supply.