China’s car market may be the biggest in the world, but the pressure of competition has brought some questionable tactics into play. According to China’s state news agency Xinhua, certain carmakers have been exaggerating pre-sale orders to create the impression of strong demand, a move that could mislead both consumers and investors.
According to Reuters, The Xinhua Daily Telegraph reported that some companies went as far as asking their own employees to place refundable deposits, while others turned to what it called a “grey industry chain” that specialises in artificially boosting order books. These inflated figures, the report added, are rarely verified by third parties and often end up being far higher than the actual number of cars delivered to customers.
This practice has already raised eyebrows among regulators. In September, China’s industry ministry announced a three-month campaign to clamp down on false marketing and other irregular online activity in the automotive sector. Industry insiders admit that the trend is becoming a problem, with concerns that it could damage the sector’s long-term credibility.
The criticism isn’t new. Just days earlier, the official Economic Daily also weighed in, noting that order-padding originally emerged in the smartphone industry, where companies would boast about millions of pre-orders that had little real-world backing. What started as a tech-world gimmick has now found its way into the auto industry, where manufacturers compete to present the most impressive numbers.
Nio boss William Li has been vocal on the issue, pointing out that his company does not engage in such tactics. He explained that inflating orders may look good on paper but ultimately disrupts the balance between production and sales.
This latest scrutiny comes against the backdrop of a brutal price war among Chinese carmakers. Reuters has previously revealed how manufacturers and dealers have inflated sales through creative methods, from using insurance schemes to classifying new vehicles as used before shipping them abroad. Local governments, eager to show economic growth, have sometimes encouraged these unusual sales tactics.
Observers say the root of the problem lies in China’s “production-oriented” industrial model, which has encouraged oversupply and left automakers under pressure to move metal at all costs. Despite the concerns, the numbers remain staggering. Between January and August 2025, car sales in China rose by 9.9 per cent to 14.9 million units. The China Passenger Car Association also highlighted that in August alone, China accounted for 38 per cent of global car sales, thanks in part to heavy government subsidies.
For now, the industry remains caught between impressive headline figures and the reality behind them. Regulators may be turning up the heat, but whether these questionable practices disappear any time soon remains to be seen.
