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.
So like whats the problem? New car for used car prices? I dont understand
The Chinese government is paying huge incentives for every car sold. This is their way of gaming the system to subsidize their industry and undercut non-Chinese auto makers.
I guess they just want to win more than the competition does.
This sort of “win” can end in two way, either the average car price is being lowered and benefiting consumer, or low level employees getting shoved for the lower margin of profits. Or both. Either way, it mean more new car on the road.
Undercutting competitors to establish a monopoly.
In other words, they competing and winning. Sounds like the competition really needs to do better.