Shanghai (Reuters) -China's Trade Ministry will meet the industrial authorities and car manufacturers, including BYD and Dongfeng engine to discuss the increasing sale of “used cars” that were never driven, a person with direct knowledge of the business said. The meeting was set up for Tuesday afternoon, the person said speaking on condition of anonymity because details of the meeting were confidential.
It comes after the chairman of the Great Wall Motor Weijun said last week in an interview with Sina Finance that a phenomenon called “used cars with zero mileage” had arisen on the Chinese market as a result of the years of prize war of the industry.
The phenomenon, he said, concerned cars that were registered and had license plates – which they marked as sold – but never was driven to be sold in the second -hand market. Wei said that at least 3,000 to 4,000 suppliers sold such cars on Chinese used car platforms.
The source said that the tactic was seen as a potential method within the industry for car manufacturers and dealers to support new car sales in achieving aggressive sales goals.
Other participants invited for 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 Ministry of Trade, BYD, Dongfeng Motor and Cada did not immediately respond to a request for comment. Great Wall and Caam refused to comment.
Shares in Chinese car manufacturers such as BYD and Leap engine extended losses after Reuters had reported the meeting, with both dropped 3.1%. The Hang Seng Automobile index of Hong Kong fell by more than 2%.
(Reporting by Shanghai and Beijing Newsrooms; Edit by Clarence Fernandez and Kate Mayberry)
