AsianFin -- China’s auto industry has long relied on a grey-market export scheme—backed by local governments—to inflate domestic sales figures by registering brand-new vehicles as “used” before shipping them overseas.

These so-called “zero-mileage” cars, which have never been driven on Chinese roads, are increasingly being exported to markets such as Russia, Central Asia, and the Middle East. The practice allows automakers to boost reported sales and offload excess inventory that might otherwise struggle to find buyers at home, according to a Reuters review of official documents and interviews with five car dealers and exporters.

While the cars are technically registered in China, enabling them to be classified as used under trade rules, they are effectively brand new when they leave the country—creating a loophole that distorts both sales and export data.