China’s Ministry of Commerce is meeting with some of the country’s biggest automakers to discuss whether the industry is using a loophole to mask weakening sales.
The meeting, which was set to take place yesterday afternoon, also included industry bodies such as the China Automobile Dealers Association and online car distribution channels, according to a memo shared by Li Yanwei (李顏偉), an official at the dealers’ association, on Weibo.
A representative for Dongfeng Motor Group Co (東風汽車) said officials from the company attended the gathering. Invitations were extended to carmakers on Sunday and the event wasn’t an inquiry.
Photo: AFP
‘Zero-mileage’ cars came to public attention last week, when Great Wall Motor Co (長城汽車) chairman Wei Jianjun (魏建軍) warned of an unhealthy outlook for China’s car industry following a years-long price war.
The practice sees automakers that have failed to meet their sales targets distribute new vehicles to supply chain financing companies or used car dealers, according to Li. These essentially new cars then appear on the resale market with no mileage and manufacturers record them as sales despite not reaching the end-consumer, he wrote on Weibo.
While that would be viewed as fraud in places like the US, it’s not clearly regulated in China, he said. He urged the Chinese Ministry of Commerce and China Securities Regulatory Commission to stamp out the practice.
It’s unclear which companies are involved, but Wei estimated that as many as 4,000 second-hand sellers post ‘zero-mileage’ cars on online platforms.
He pointed to the practice as indicative of the chaos engulfing China’s auto sector, and warned the industry is facing its own China Evergrande Group (恆大集團) — the defaulted builder that’s an emblem of the country’s years-long property crisis. He declined to identify the company he alluded to.
China’s auto sector has been embroiled in an extended price war that’s taking a major toll on carmakers.
BYD Co (比亞迪) saw shares slump about 10 percent in the first two days of this week after announcing price reductions of as much as 34 percent on Chinese models until the end of next month. The market leader last month posted its slowest year-on-year growth in vehicle deliveries in more than four years.
The domestic unit of the Chinese-owned, Dutch-headquartered chipmaker Nexperia BV will soon be able to produce semiconductors locally within China, according to two company sources. Nexperia is at the center of a global tug-of-war over critical semiconductor technology, with a Dutch court in February ordering a probe into alleged mismanagement at the company. The geopolitical tussle has disrupted supply chains, with some carmakers reportedly forced to cut production due to chip shortages. Local production would allow Nexperia’s domestic arm, Nexperia Semiconductors (China) Ltd (安世半導體中國), to bypass restrictions in place since October on the supply of silicon wafers — etched with tiny components to
Singapore-based ride-hailing and delivery giant Grab Holdings Ltd has applied for regulatory approval to acquire the Taiwan operations of Germany-based Delivery Hero SE's Foodpanda in a deal valued at about US$600 million. Grab submitted the filing to the Fair Trade Commission on Friday last week, with the transaction subject to regulatory review and approval, the company said in a statement yesterday. Its independent governance structure would help foster a healthy and competitive market in Taiwan if the deal is approved, Grab said. Grab, which is listed on the NASDAQ, said in the filing that US-based Uber Technologies Inc holds about 13 percent of
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday received government approval to deploy its advanced 3-nanometer (3nm) process at its second fab currently under construction in Japan, the Ministry of Economic Affairs said in a news release. The ministry green-lit the plan for the facility in Kumamoto, which is scheduled to start installing equipment and come online in 2028 with a monthly production capacity of 15,000 12-inch wafers, the ministry said. The Department of Investment Review in June 2024 authorized a US$5.26 billion investment for the facility, slated to manufacture 6- to 12nm chips, significantly less advanced than 3nm process. At a meeting with
Taiwan’s food delivery market could undergo a major shift if Singapore-based Grab Holdings Ltd completes its planned acquisition of Delivery Hero SE’s Foodpanda business in Taiwan, industry experts said. Grab on Monday last week announced it would acquire Foodpanda’s Taiwan operations for US$600 million. The deal is expected to be finalized in the second half of this year, with Grab aiming to complete user migration to its platform by the first half of next year. A duopoly between Uber Eats and Foodpanda dominates Taiwan’s delivery market, a structure that has remained intact since the Fair Trade Commission (FTC) blocked Uber Technologies Inc’s
RSS