Exclusive: China auto industry inflates sales by exporting new cars as 'used'
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If I understand the explanation, its like when an author (or their proxies) buys thousands (millions) of copies of their own book to make them "sold" so that they can raise their standing on the "Best Seller's List".
It never occurred to me that authors would do that, but of course they would.
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Production is subsidized by the government, so it's not a free market.
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It never occurred to me that authors would do that, but of course they would.
That's what politicians, famous people, and anyone who works with a charity does.
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China's auto industry has inflated car sales for years through a burgeoning government-backed grey market that registers new cars right off the assembly line and then ships them overseas as "used" vehicles.
These so-called "zero-mileage" cars have never been driven but they are being exported as used to markets like Russia, Central Asia and the Middle East, allowing Chinese automakers to show growth and to dispose of cars that it would be difficult to sell domestically, according to a Reuters review of government documents and interviews with five auto dealers and car traders.
"This is the outcome of an almost-four-year price war that has made companies desperate to book any sales possible," said Tu Le, Michigan-based founder of consultancy Sino Auto Insights.
In my western country, car dealers do the same in order to meet their sales target
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China's auto industry has inflated car sales for years through a burgeoning government-backed grey market that registers new cars right off the assembly line and then ships them overseas as "used" vehicles.
These so-called "zero-mileage" cars have never been driven but they are being exported as used to markets like Russia, Central Asia and the Middle East, allowing Chinese automakers to show growth and to dispose of cars that it would be difficult to sell domestically, according to a Reuters review of government documents and interviews with five auto dealers and car traders.
"This is the outcome of an almost-four-year price war that has made companies desperate to book any sales possible," said Tu Le, Michigan-based founder of consultancy Sino Auto Insights.
Sound like a standard case of misaligned incentives in a planned economy. As far as those go this is quite benign.
Central government sets targets for selling cars domestically, so of course every car is going to be sold domestically. Even those sold internationally.
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China's auto industry has inflated car sales for years through a burgeoning government-backed grey market that registers new cars right off the assembly line and then ships them overseas as "used" vehicles.
These so-called "zero-mileage" cars have never been driven but they are being exported as used to markets like Russia, Central Asia and the Middle East, allowing Chinese automakers to show growth and to dispose of cars that it would be difficult to sell domestically, according to a Reuters review of government documents and interviews with five auto dealers and car traders.
"This is the outcome of an almost-four-year price war that has made companies desperate to book any sales possible," said Tu Le, Michigan-based founder of consultancy Sino Auto Insights.
The Chinese EV industry is overdue for consolidation. There are too many players chasing too few customers. This could be done in a relatively orderly fashion that leaves a few big players that are internationally competitive. Or they can keep kicking the can down the road and hope for the best, until the inevitable collapse. Gee, I wonder which option they'll choose.
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For decades Ford Europe has had an employee scheme whereby they can get brand new hugely discounted cars every few months. This extended to their families and friends. Each employee could request several vouchers from Ford which are then used at a Ford dealership in exchange for a car on incredibly good finance payments. This was designed to boost the number of registered cars straight from the assembly line.
This sort of thing has always been standard practice in the automotive industry. The point is, this won't work to paper over the cracks in China with their massive oversupply.
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That's what politicians, famous people, and anyone who works with a charity does.
It's what helps Dianetics stay in the Bestsellers lists.
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Production is subsidized by the government, so it's not a free market.
You know all American auto manufacturers receive federal subsidies, grants, and huge tax breaks, right? It's ok for the USofA to do that, but not China. GTFO bootlicker.
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You know all American auto manufacturers receive federal subsidies, grants, and huge tax breaks, right? It's ok for the USofA to do that, but not China. GTFO bootlicker.
Don't put words in my mouth.
