China has issued new restrictions on exports of used vehicles, closing a loophole that had previously allowed traders to ship new cars into overseas markets under the guise that they were second-hand.
Under the rules issued by the Ministry of Commerce and other agencies, companies that want to export cars that have been registered for fewer than 180 days need to show proof that they can provide after-sales services at their destination.
Firms will also need to show that they have the approval of the vehicle’s manufacturer to ship the car.
If traders can’t provide those details, they won’t get an export license.
The new rules seek to more tightly control exports and to prevent negative consequences that could result from quality issues and breaching the destination country’s regulations, according to a document published on the ministry’s website on Friday.
Local authorities have also been asked to maintain a list of companies that have breached the rules and carefully monitor the veracity of the information being submitted in their export paperwork, it said.
Chinese authorities have repeatedly sought to rein in the country’s sprawling auto industry this year, including cracking down on aggressive discounting, seeking to overhaul door handle designs and requiring permits to export electric vehicles.
The new rules focus on so-called zero-mileage cars — another target of officials who contend that some companies inflate their sales figures by offloading new cars to traders and booking the deliveries before they have reached the end consumer.
The Chinese industry is simultaneously facing domestic overcapacity and growing demand for affordable EVs and hybrids abroad, prompting traders to make use of an export category that’s less regulated.
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