Under market competition pressure, some automakers have resorted to using "zero-mileage used cars" as a tool to create a false sense of prosperity in order to embellish their sales data.
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Zeekr, Neta inflated sales figures by selling '0-mileage used cars,' reports say
Chinese electric vehicle (EV) brands Zeekr and Neta inflated sales figures in recent years to meet aggressive targets, with Neta doing so on over 60,000 cars, according to a report by
Reuters yesterday, citing documents reviewed by the outlet and interviews with dealers and buyers.
These companies arranged insurance for the vehicles before they are sold to buyers, allowing them to book sales early under industry practices in China's vehicle registration, thereby meeting monthly and quarterly targets, according to the report.
In China's automotive industry, vehicles sold before they reach buyers are referred to as "zero-mileage used cars," and their emergence reflects the intensely competitive nature of the market.
From January 2023 to March 2024, Neta pre-booked sales of at least 64,719 vehicles through this method, exceeding more than half of the 117,000 vehicles it reported selling over the 15-month period, Reuters says, citing copies of records Neta sent to dealers that it had seen.
Geely's premium EV brand Zeekr also employed the same method, pre-booking sales in Xiamen in late 2024 through its main dealer in the city -- state-owned Xiamen C&D Automobile, according to Reuters.
Earlier yesterday, China Securities Journal, an official Chinese media outlet,
featured the same matter on its front page.
Zeekr sold a large number of insured inventory vehicles as new cars under the guise of limited-time offers, sparking complaints, according to the China Securities Journal.
Some consumers in Guizhou, Chongqing, and Guangzhou discovered that the vehicles they had purchased were already insured "used cars" when they were preparing to take delivery, the report said.
For Neta, insurance registration data for 2022 showed that the proportion of corporate customers was only 8 percent. However, this proportion surged to 63 percent in 2023, according to the China Securities Journal.
Corporate customers refer to those who purchase vehicles under a company name, as opposed to individual customers.
Among the top 20 cities in terms of Neta's sales, 17 cities had a corporate customer ratio exceeding 40 percent, and 11 cities had a ratio exceeding 90 percent, according to the report.
Insurance registration data for automakers is recorded by third-party institutions, and this data is watched by the industry, media, and capital markets as a "barometer" of an automaker's sales performance, according to Li Yanwei, an expert committee member of the China Automobile Dealers Association, as cited by the China Securities Journal.
Under market competition pressure, some automakers have used "zero-mileage used cars" as a tool to create false prosperity, prematurely recognizing sales and revenue to mislead the capital market about the true supply and demand situation, the report cited an unnamed senior sales manager from an automaker as saying.
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