Chinese State Media Takes Aim at ‘Zero-Mileage' Used Cars
(Bloomberg) -- The Communist Party controlled People's Daily newspaper has urged Chinese carmakers to stamp out 'zero-mileage' used vehicles in the latest rebuke to the auto industry amid growing concern unbridled competition could upend the market.
In a commentary published Tuesday, the paper said the practice of shifting almost new cars into the second-hand market was used by manufacturers and dealers to meet sales goals, but weakened their balance sheets and could lead to consumers losing proper rights when purchasing the vehicles.
'Zero-mileage' cars are essentially an extension of the industry's price war and reflect the fierce competition gripping the market. The newspaper also called for automakers to stop their singular focus on sales and put that drive into improving technology and services. It suggested consumers shouldn't just look at the price when shopping for cars, but also product quality and after-sale care provided.
The article follows a series of recent interventions from Chinese authorities on competition in the auto industry. Regulators have held at least two meetings in the past two weeks with manufacturers to address a range of topics, including 'zero-mileage' used cars. Auto executives last week were told to 'self-regulate' and not sell cars below cost or offer unreasonable price cuts. The scrutiny stepped up after market leader BYD Co. last month slashed prices by as much as 34%.
'Zero-mileage' used cars is a practice in which automakers that have failed to meet sales targets offload new vehicles to supply chain financing companies or second-hand car dealers. The essentially new vehicles then appear on the resale market with no mileage, while manufacturers record them as sales despite the cars not yet having reached an end-consumer.
The increased pressure has seen automakers trade barbs at each other. Great Wall Motor Co. founder Wei Jianjun first raised the issue of 'zero-mileage' cars in an interview late last month. He also said the industry had its own 'Evergrande' — referring to the giant real estate developer that collapsed under a mountain of debt — though didn't name any specific automakers.
At an industry forum held in the southwestern city of Chongqing on the weekend, Zhejiang Geely Holding Group Co. spokesman Victor Yang brought up allegations that some of BYD's plug-in hybrids may have used cheaper fuel tanks that breached emissions standards. These accusations were first raised by Great Wall two years ago, and rejected by BYD at the time.
BYD's general manager for brand and public relations, Li Yunfei, hit back at the accusations on social media. He stressed that BYD's vehicles comply with regulations and that a certain automaker based in Zhejiang province also used similar fuel tanks in the past. Geely is headquartered in Zhejiang's Hangzhou city.
Addressing the accusations that BYD is the auto industry's Evergrande, he said a Hebei-based company had tried numerous times to report BYD to the authorities for financial misconduct, but none were successful, showing the company didn't have these problems. BYD welcomed supervision between peers but reserved the right to pursue legal action against smearing and other malicious behavior, he wrote in a post on Weibo on Sunday, that he later deleted.
More stories like this are available on bloomberg.com
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Time of India
44 minutes ago
- Time of India
HD Kumaraswamy reviews operations at Salem Steel Plant, calls for focus on profitability and capacity
Union Minister for Steel and Heavy Industries , HD Kumaraswamy , visited the Salem Steel Plant , a unit of the Steel Authority of India Ltd. (SAIL), where he reviewed its operations and discussed ways to enhance profitability and capacity utilisation. Kumaraswamy was received by the district administration and plant officials. He was accorded a Guard of Honour and planted a sapling on the premises, marking the visit's focus on sustainable practices. 'Steel is not just a material, it is the backbone of national development. From infrastructure to innovation, our goal is growth with responsibility,' he said during the visit. The visit aligns with Prime Minister Narendra Modi 's national vision of increasing India's steel production capacity to 300 million tonnes by 2030, achieving Net Zero emissions by 2070, and supporting the broader goal of building a developed India by 2047. Steelmaking process Kumaraswamy toured several units in the plant, observing the production cycle from scrap processing to slab casting. He visited the scrapyard, Steel Melting Shop , Electric Arc Furnace (EAF) , and slab caster , and observed operations involving the torch cutting machine and cold rolling mill. 'The level of technological sophistication and discipline I've seen here is commendable. This plant reflects the true spirit of Make in India,' the Minister stated. The EAF-based production process at Salem is part of a cleaner steelmaking approach aimed at reducing emissions in line with India's climate targets. Discussions on strategic upgrades and speciality steel The Minister also reviewed the plant's output of stainless steel products, including pipes, railway wagons, submersible pump components, coin blanks, and domestic LPG cylinder sheets. These are used across various sectors such as infrastructure, railways, defence, and energy. 'The finished products emerging from this plant touch millions of lives every day from homes to industries,' Kumaraswamy said. In a review meeting attended by the Chairman and Managing Director of SAIL, Joint Secretary (Steel), and the Executive Director of the Salem Plant, the Minister discussed plans to enhance the plant's focus on speciality steel. These products are used in applications such as defence, railways, aerospace, and engineering. 'We are committed to revitalising this strategic asset. Speciality steel is the future, and Salem Steel Plant can become more cost-efficient by using renewable energy including solar and wind. There should be full capacity utilisation and deciding on the final product mix,' he added. The Minister also met with labour union representatives and assured them of action on their concerns.
Time of India
an hour ago
- Time of India
India to become fourth-largest EV producer by 2030: Report
India's electric four-wheeler manufacturing capacity is projected to grow tenfold to 2.5 million units by 2030, from 0.2 million units currently, according to new research by Rhodium Group. This expansion would make India the fourth-largest electric vehicle (EV) producer globally, following China, the European Union, and the United States. The report, part of Rhodium's Global Clean Investment Monitor , notes that India's manufacturing capacity is expected to exceed domestic demand by 1.1–2.1 million units over the next five years. The report suggests this surplus may create an opportunity for exports but also cautions that Indian automakers will need to reduce costs to compete with Chinese manufacturers. 'This far exceeds India's projected 2030 EV demand (which likely reaches anywhere from 430,000 to 1.4 million vehicles depending on the pace of policy and battery costs), suggesting the potential for future exports,' Rhodium said. 'This push aligns with the government's strategy to ' Make in India for the world ', but Indian companies will need to drive down costs if they want to compete with exports from China.' Domestic sales and global rankings India's domestic EV car demand is projected to reach between 430,000 and 1.4 million units by 2030, up from around 100,000 in 2024. With total car sales currently estimated at 6 million units, this implies an EV penetration rate of 7–23 per cent in the passenger vehicle segment. In the last financial year, domestic manufacturers Tata Motors, MG Motor, and Mahindra accounted for nearly 90 per cent of EV sales, based on Vahan dashboard data. India's projected capacity of 2.5 million units by 2030 will follow China's 29 million, the EU's 9 million, and the US's 6 million units. Rhodium's report notes that India will lead all other countries outside of these three markets, surpassing Japan and South Korea in anticipated production capacity. Japan and South Korea currently have operational capacities of 1.1 million and 500,000 units respectively. Their 2030 capacity is expected to reach 1.4 million and 1.9 million units, respectively. Policy approach and battery production Rhodium Group notes that India's EV sector growth is being shaped by a combination of industrial policy, market incentives, and trade protection measures. Consumer subsidies are linked to localisation requirements, and incentives have been provided to manufacturers of EV components and advanced batteries. India has also introduced measures to expand charging infrastructure. To protect local production, India maintains import tariffs of 70–100 per cent on fully built EVs. 'This protective stance has helped domestic production grow but also limits consumer choice and raises costs. Nearly 100 per cent of India's EV manufacturing is for its domestic market,' the report added. The report also highlights India's position in battery module manufacturing, noting that the country is set to become the largest module producer outside China, the US, and Europe. While cell production capacity will still trail major markets such as China, Europe, the US, and Canada by 2030, it is projected to exceed that of South Korea, Malaysia, Japan, and others. India's EV penetration rate stood at 2 per cent in 2024. In comparison, Vietnam's rate rose from 3 per cent in 2022 to 17 per cent in 2024, led by local automaker VinFast.
Time of India
an hour ago
- Time of India
Magnets in limbo: No rare earth nod yet from China for Indian auto suppliers
No Indian auto component or vehicle manufacturer has received approval from the Chinese government to procure rare earth magnets so far, Times of India reported citing sources. Despite efforts by Indian officials to intervene, the sources said there is "no clarity as yet" on when a meeting with Chinese representatives might happen. The applications for sourcing magnets were submitted primarily by auto component makers who manufacture complete, high-tech assemblies. These include speedometers, electric motors, e-axles, electric water pumps, automatic transmission kits, speakers, sensors, and ignition coils used in engines. Among the companies that have applied are Uno Minda , Bosch , Mareli, TVS Group, Motherson Sumi , and Sona Comstar. Economic Times reported this week that the number of India-based firms awaiting approval from China's ministry of commerce to import rare earth magnets has nearly doubled—from 11 two weeks ago to 21 now. This list includes Bosch India, Marelli Powertrain India, Mahle Electric Drives India, TVS Motor, and Uno Minda. Sona Comstar, whose earlier application was rejected due to procedural issues, has reapplied and is now among the 21 companies awaiting clearance, a senior industry executive told ET. 'There were no approvals so far, according to the latest assessment we carried through interactions with industry representatives,' one source told TOI. 'The situation is grave, and there is now massive uncertainty regarding manufacturing schedules and factory output.' The request for a meeting with Chinese representatives is being followed up not only by leading industry bodies such as the Auto Component Manufacturers Association (Acma) and Society of Indian Automobile Manufacturers (Siam), but also by government ministries including heavy industries, external affairs, and commerce. Senior officials from major automobile companies such as Maruti Suzuki , Mahindra & Mahindra, Tata Motors , Bajaj Auto , and TVS are also involved in pursuing the matter with the government and diplomatic channels. Earlier this week, the auto industry held a meeting with top officials at the Ministry of Heavy Industries as the government examined possible solutions to the crisis. 'However, not much headway was made so far,' an official source told the newspaper. Industry executives said that Ernst & Young has been brought on board by the ministry to assist with the issue. During the meeting, officials also reviewed the current preparedness of some Indian companies that are working in the field of magnet production. Automakers urged local magnet producers to provide a firm supply timeline, if at all possible, stating that uninterrupted production lines depend on timely procurement of components. According to the report, both Acma and Siam have drawn up a list of delegates they hope to send to China if the Indian government is able to facilitate such a visit. China's restrictions were formally issued through a notification on April 4 this year. The new rules apply to medium and heavy rare earth metals, their alloys, magnets, and related products under the country's export permit system. To prevent diversion of these materials to defence and weapons production, China now requires exporters to secure a licence. This licence depends on an End User Certificate (EUC), which must be approved first by India's Directorate General of Foreign Trade (DGFT) and the Ministry of External Affairs, and then also endorsed by the Chinese Embassy in India. Only after these steps are completed can the EUC be sent to China for the final stages of approval—first by the provincial government where the exporting company is located, and then by China's Ministry of Commerce. Rare earth magnets are critical components used in permanent magnet synchronous motors (PMSMs), which are widely applied in electric vehicles because of their compact size, high torque, and energy efficiency. Hybrid vehicles also rely on these magnets for efficient propulsion systems. While parts manufacturers based in Europe have recently received approval from Chinese authorities to source rare earth magnets, their Indian counterparts—despite being part of the same multinational corporations—are still waiting for the go-ahead from Beijing. According to experts, this delay is worsened by the strained political and commercial relationship between India and China. Indian companies have been attempting to build local capabilities to reduce reliance on imported rare earth materials, but experts say this effort remains extremely challenging and is unlikely to provide immediate relief. (with ToI inputs)
