Here’s something interesting from the Chinese domestic market. The country’s commerce ministry will meet auto industry bodies and carmakers including BYD and Dongfeng to discuss the increasing practice of selling ‘used cars’ that are actually brand new and have not been driven before.
The meeting apparently happened yesterday, according to a Reuters source speaking on condition of anonymity as details of the meeting were confidential.
Sounds familiar? It’s a common practice for OEMs to sell ‘pre-registered’ cars in Malaysia, some with just delivery miles on the clock. These virtually brand new cars have already been registered with number plates, hence the ‘pre-reg’ term, and are sold with attractive discounts. It’s done to boost new car sales figures and/or to meet sales targets. Buyers benefit, and the only drawback is not being able to choose your own number plate.
Looks like it isn’t a common practice in China though. The issue was raised by Great Wall Motor chairman Wei Jianjun in an interview with Sina Finance last week. He said that as a result of the Chinese auto industry’s years-long price war, OEMs are resorting to the pre-reg practice to move metal. Wei said that at least 3,000 to 4,000 vendors on Chinese used car platforms were selling such cars.
Parties in the talks include the China Association of Automobile Manufacturers (CAAM), China Automobile Dealers Association (CADA) as well as some used car trading platforms, the source to Reuters. The commerce ministry, CADA, BYD and Dongfeng did not did not immediately respond to a request for comment, while GWM and CAAM declined.
Competition is tight in China, and if not for Malaysia driving on the different side of the road, many of these unsold cars meant for the domestic market would be piling up at our ports, we can imagine. Anyway, have you ever profited from a sweet pre-reg deal or regretted not snapping one up?
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