GWM: China’s EV Market Is Drowning in Zero-KM Used Cars

In a rare and scathing interview, Great Wall Motor (GWM) Chairman Wei Jianjun shed light on what he describes as a dangerous and deceptive trend distorting China’s auto market - zero-kilometre (zero-KM) used cars.

These are brand-new vehicles that have never been driven, yet are registered as sold as used or pre-registered. The practice is a quiet but powerful manipulation -  while buyers see attractive discounts, the industry sees artificial sales figures, mounting inventory and an unsustainable future.

At the heart of the issue is a strategy used by automakers to inflate sales. Desperate to meet targets in an oversaturated market, manufacturers push vehicles through dealers or financing partners who then register them and re-list them as “pre-owned.” 

On paper, the car is sold. In reality, it never left the lot. This tactic unlocks government subsidies, props up quarterly earnings, and hides the truth - China’s auto sector is awash in unsold inventory.

Wei compares the scheme to China’s infamous property bubble, even citing the Evergrande scandal as a cautionary parallel.

As of April 2025, national passenger car inventory had swollen to 3.5 million units, with some factories running at less than 50% capacity. Brands are now resorting to deep discounting and data manipulation just to survive.

The tipping point came in May, when Chinese EV leader BYD, fresh off overtaking Tesla in global sales, announced sweeping discounts of up to 34% across 22 models. The aggressive move triggered a chain reaction, with rival automakers slashing prices overnight.

Stock markets took a hit, investor confidence wavered, and industry alarms blared.

To the average buyer, the deal seems sweet: “nearly new” zero-KM cars at up to 30% off. But beyond the showroom, this practice also distorts growth metrics, misleading investors and regulators alike. “In the long run, brands are cannibalizing their own value,” Wei warned.

Following Wei’s revelations, China’s Ministry of Commerce summoned major players - including BYD, Dongfeng and used car platform Guazi - for emergency talks on May 27. Discussions focused on curbing fraudulent reporting, tightening used car regulations, and implementing stricter rules on sales practices.

One proposal reportedly under review is a framework similar to the U.S. SEC’s channel stuffing laws, which prohibit companies from artificially inflating revenues by offloading unsold goods into third-party channels.

While Wei’s exposé paints a dire picture of China’s market, zero-KM cars are not a new concept - especially in Malaysia.

Due to high vehicle prices, a significant portion of Malaysia’s total industry volume (TIV) consists of pre-registered units. Malaysian buyers are often aware of this dynamic, with many waiting for pre-reg promotions to secure better deals.

However, the key difference lies in transparency. In Malaysia, the practice is expected and accepted. In China, it’s a symptom of deeper structural issues - a last-ditch effort to preserve appearances in a struggling market.

Wei Jianjun’s candid critique is more than a whistleblower’s plea - it’s a call for systemic reform. The illusion of booming sales can only last so long and if left unregulated the industry risks collapsing under the weight of its own deceptions.