China Tightens Regulations on 'Zero-Mileage' Car Exports
China is cracking down on the export of new cars falsely declared as used vehicles, a move that could have ripple effects in markets like South Africa. The new regulations, set to take effect next year, aim to ensure fair market activity and regulate competition in the burgeoning used car export sector.
The Ministry of Commerce announced that exporters will now need to prove after-sales service availability in the destination country for vehicles registered within 180 days. This verification must come directly from the car manufacturer, adding a layer of accountability to the process.
Why the Crackdown?
The focus is on so-called “zero-mileage” second-hand cars – essentially brand-new vehicles sold under the guise of used ones. This practice has been criticised by carmakers for distorting the market, as these vehicles are often sold at lower prices but without guaranteed after-sales support.
Since China allowed used car exports in 2019, this practice has grown alongside its expanding electric vehicle (EV) manufacturing sector. These vehicles have become popular in various overseas markets, including Central Asia, Russia, the Middle East, and Africa.
Impact on South Africa
South African consumers and dealerships that import used vehicles from China may face changes. The increased scrutiny on export licenses and compliance could lead to higher prices or delays in shipments. However, it could also ensure better quality control and access to after-sales service, ultimately benefiting consumers in the long run.
- Potential for increased prices on imported used vehicles.
- Greater assurance of after-sales service availability.
- Possible delays in shipments due to stricter compliance checks.
Local commerce authorities in China will also be strengthening oversight of export license issuance and compliance, signalling a commitment to cleaning up the industry and promoting healthy development.