(Yicai) Sept. 8 -- China’s new trend of exporting “zero-kilometer” used cars is under pressure as domestic brands expand overseas and more countries tighten restrictions on vehicle imports.

To clear inventories and boost sales, many automakers have partnered with used car dealers to ship vehicles with no previous owners abroad. Dealers told Yicai that zero-kilometer cars are essentially new vehicles with no mileage but are sold at discounts of around 20 percent compared with new models.

Fierce domestic price wars have pushed automakers to offload excess stock at steep discounts. An insider at the China Automobile Dealers Association told Yicai that more than half of new car dealers are currently operating at a loss, leading some to cooperate with used car exporters to ease cash flow pressures.

But the window for exporting like-new cars may be closing. Tang Zhikun, general manager of Xpeng’s international business division, said many foreign governments have begun tightening rules this year, banning imports of zero-kilometer used cars through stricter regulations and certification requirements.

China, the world's largest auto producer, began exporting used cars in 2019 through a pilot program that shipped about 3,000 vehicles. The figure surged to 436,000 units last year.

Still, exports remain a small slice of China’s overall secondhand car market. According to CADA, overseas shipments account for less than 10 percent of the total, with the zero-kilometer trend concentrated in electric vehicles. Over 90 percent of exported secondhand EVs last year were nearly new, cutting into dealers’ profit margins.

Foreign buyers have benefited most from this practice. Wu Qing, a car dealer with long experience in the Middle East and Central Asia, said customers there place great importance on vehicle condition and demand formal inspection reports verifying repaint history, rather than relying on video checks with a paint gauge.

Nearly new exports are a temporary phenomenon, said Li Yongfeng, general manager of GAC Group’s government and enterprise customer center. As independent Chinese brands strengthen their presence in global markets, demand for zero-kilometer used cars is expected to fade, he noted at an industry conference.

Editor: Emmi Laine