Zero-mileage cars are the weird loophole helping China hit economic targets

Zero-mileage cars are the weird loophole helping China hit its economic targets.

A ‘Zero-mileage car’ is one that is registered as soon as it comes off the end of an assembly line.

These cars are then shipped to foreign markets, advertised as used vehicles despite having no miles or previous owners.

This is part of a wider price war that has been raging in China’s auto industry for the past few years.

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How zero-mileage cars are helping China hit its economic targets

From the perspective of the Chinese government, the zero-mileage scheme ticks a lot of boxes.

Here’s how it works.

As soon as a car rolls off the assembly line, an exporter purchases it from the automaker or a vehicle dealer.

The carmaker marks it as sold and adds that to the balance sheet.

The exporter, counting the car as used, sends it abroad to a foreign market, usually in Russia or the Middle East.

In a centrally planned economy like China’s, everyone wins out here.

Regional and local governments often run carmakers, so they hit targets and keep production lines running.

Local residents keep their jobs at the factories, and government officials keep their positions of power.

So, from that point of view, things sound hunky-dory, right?

Well, there’s a few issues to come to terms with.

Firstly, China’s production capacity is double the amount of cars it sells domestically, leading to low profits and accusations that China is ‘dumping’ its cars abroad.

Then there’s the fact that zero-mileage cars distorts market data and hurt brand credibility.

China’s car industry has been on the up for years

The countries you’d traditionally associate with car-making prowess would be Germany or Japan.

But these days, China is the biggest producer, making more than 30 million vehicles in 2023.

In particular, Chinese manufacturers have been doing well with EVs.

In fact, Chinese brands even managed to collectively outsell Mercedes vehicles in Europe in early 2025.  

The best selling car in China in 2025? It was the Geely Xingyuan, with 205,000 being sold in China before June.

In the long term, will the zero-mileage car scheme backfire?

Who’s to say?

But for now, China looks to be sitting pretty as far as car manufacturing goes.

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