Chinese Buyers Say They’re Finding Insurance On Cars They Haven’t Even Bought Yet
One prominent Chinese carmaker registered half of all its cars before selling them over a 14-month period
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by Brad Anderson
Chinese dealers reportedly register cars early to help hit internal monthly sales goals.
Some buyers found their new vehicles already insured under someone else’s name.
Several automaker-linked dealerships have acknowledged using this controversial tactic.
Surging car sales from China’s automakers might not be quite as clear-cut as they seem. Behind the headline-grabbing numbers lies a practice that’s prompting questions: some companies appear to be boosting reported sales by insuring vehicles before they’re actually sold.
A new report from Reuters sheds light on this strategy, claiming that several of China’s top car manufacturers have been counting cars as “sold” once they’re insured, even if those vehicles haven’t yet reached buyers. Thanks to this approach, sales figures appear stronger than they truly are, giving the impression that targets are being met.
Read: China’s Next Supercar Is Coming For Ferrari And They’re Not Laughing Anymore
Earlier this month, reports surfaced that Neta and Zeekr had insured tens of thousands of vehicles before selling them to buyers, allowing the companies to book sales early under Chinese industry car registration practices. In the case of Neta, it reportedly recorded early sales of at least 64,719 cars from January 2023 to March 2024, more than half of the total 117,000 vehicles it sold over that period.
As it turns out, many other companies could be doing the same. Reuters recently examined 97 customer complaints related to the controversial sales practice, and in more than a dozen cases, buyers were told by dealerships that the method was used specifically to help manufacturers hit sales goals. In many cases, customers only discovered their new vehicles had been previously insured after completing the purchase.
Neta
Dealerships affiliated with major brands such as FAW Hongqi, SAIC Roewe, SAIC VW, Dongfeng Nissan, GAC Toyota, GAC Honda, and SAIC GM have admitted to official media that insuring unsold vehicles is a practice used to meet sales targets.
Interestingly, a Honda spokesperson told Reuters that GAC Honda dealers are prohibited from taking out compulsory insurance before selling new cars. Similarly, FAW Hongqi says it does not engage in such shady practices. GM China also said that it only counts deliveries, not insured vehicles, in its sales reports.
Two key metrics are used to track sales in China. The first are reported from automakers to the industry association, showing sales from automakers to dealers. The second is retail data based on mandatory traffic insurance registrations, which captures actual sales to consumers.
The practice is understood to have first emerged as early as 2016 but is believed to have grown in popularity from early 2023 when the Chinese car price war kicked off. Companies like Li Auto have reportedly leaned heavily into publishing weekly sales rankings on social media, using only insurance registration numbers to demonstrate their performance.
China’s Association of Automobile Manufacturers (CAAM) has pushed back against the use of insurance data for public sales rankings, calling the figures unreliable and blaming them for fueling what it described this month as increasingly cutthroat.
