The rise of China as a global automotive superpower has been remarkably fast, but it seems perhaps too fast. A new report claims that the car market in China is in such a wild state of oversupply that not only are pre-registered cars a big deal domestically, they’re also being sold abroad as a way to export cars and pump sales figures at home.
Also in today’s Morning Dump, we now know when Volkswagen plans on adding a volume knob to its ID.4 electric crossover, and while VinFast has slashed pricing on the VF 8 by more than $6,000, it still doesn’t look like a great deal on paper. Oh, and while the Ford Explorer Timberline is dead, long live the Ford Explorer Tremor.
Welcome back to The Morning Dump, where we take the moist, rich cake of recent car news, cut out a few of the best bits, and chop them down into bite-sized pieces best enjoyed with coffee or tea. I’m still taking over duties from Matt today, so without further ado, let’s hit it.
How China Reportedly Juices Car Sales Figures Through Pre-Registration
It’s hard to visualize the scale of China’s auto industry, so let’s throw out some numbers. According to Bloomberg, China has the capacity to build 55.5 million vehicles annually, more than double its domestic demand and enough to cover 65 percent of all global new vehicle demand. If we add up all the active car brands headquartered in China, we get a number in the hundreds. We’re talking scale on a monumental level, to the point where it’s actually a problem. As Reuters reports, the Chinese car market has been in such a state of oversupply, automakers have been exporting brand new vehicles they can’t sell as used cars, and local governments have been helping them because it’s good for GDP; naturally, this all raises concerns around dumping and sustainability. From Reuters:
China’s auto industry has inflated car sales for years through a burgeoning government-backed grey market that registers new cars right off the assembly line and then ships them overseas as “used” vehicles.These so-called “zero-mileage” cars have never been driven, but they are being exported as used to markets like Russia, Central Asia and the Middle East, allowing Chinese automakers to show growth and to dispose of cars that would be difficult to sell domestically, according to a Reuters review of government documents and interviews with five auto dealers and car traders.
“This is the outcome of an almost-four-year price war that has made companies desperate to book any sales possible,” said Tu Le, Michigan-based founder of consultancy Sino Auto Insights.
Pre-registering cars isn’t unprecedented globally. For instance, it’s been a thing in Britain for decades due in part to the registration system for dealer demonstrators. However, pre-registration for the purpose of export is uncommon, and in this case, seems to be aided by local governments in China. From Reuters again:
Because these export firms both purchase and sell a single car, the transaction value is double that of new or used-car purchases, so local governments court them to set up shop on their turf to quickly and artificially boost their GDP statistics, two Chinese auto industry executives said.
The tactic is only one sign that China’s car industry – the world’s largest – is allowing production to outpace demand, driving a protracted domestic price war and spurring accusations of automotive “dumping” abroad.
If these vehicles are indeed being sold abroad below cost, that would definitely qualify as dumping. It also seems like an unusual way of inflating gross domestic product figures, especially with the reported level of support these schemes appear to have. Again, from Reuters:
Local government support has taken various forms, from simplifying paperwork, to allocating extra quotas for local vehicle registrations, to setting up free warehouses for zero-mileage used cars close to China’s land and maritime borders, the Chinese documents showed.
Beyond the immediate economic consequences for countries receiving these dubiously pre-registered cars, this news adds doubt to the sustainability of China’s automotive scale. If enough brand new cars are out there to necessitate registering them as used with delivery mileage and immediately exporting them, the industry in China as a whole mustn’t be doing a great job of balancing production with real demand. Something will eventually have to give, and once that happens, workers will almost certainly be the ones to pay the price.
Volkswagen’s Reportedly Fixing The ID.4 Crossover’s Interior Next Year
The Volkswagen ID.4 is a spacious, comfortable, practical electric crossover with a rather reasonable price tag, but man does the interior tech ever let it down. It’s too heavily reliant on capacitive touch controls, could absolutely use more buttons and knobs, and comes with a steep learning curve. However, that should change soon, as Autocar reports Volkswagen’s readying an extensive facelift in 2026 that will involve a heavy cabin revamp.
Inside, [technical development boss Kai] Grüntiz confirmed for the first time that the facelifted ID 3 and ID 4 will receive fully revised interiors featuring a new dashboard and user interface. Among the changes is a return of physical buttons and knobs in place of digital display-based functions and the controversial slider element, a move first hinted at by the ID 2All.
“We’re going to bring back a round knob for the volume control,” an insider said, adding: “If you develop something that works, and it has worked for years, there’s no reason to replace it.”
Indeed, if it ain’t broke, don’t fix it. While Volkswagen’s slowly been bringing more physical controls back into its cars, the arrival of an actual volume knob to the ID.4 will be a welcome change. Traditional window controls are also on my wishlist, and there’s a chance they aren’t off the table. In addition to the extensively revised interior, the facelifted ID.4 will also get styling more in line with the ID 2all concept, which means it should look more traditional. Expect to learn more next year as Autocar reports, “The facelifted ID 3 is scheduled to be revealed during the second quarter of next year, with the ID 4 arriving later in 2026.”
VinFast Slashes VF 8 Pricing But It Still Seems Like A Bad Deal
Be honest with me: When was the last time you thought about VinFast? Even on my end, it’s been a few months, and look what I do for a paycheck. While the VF 8 crossover had a disastrous launch in North America with examples on the media drive malfunctioning or straight-up physically breaking on journalists, the company’s still plugging along on this continent, and it sent out a press release today containing this tidbit:
The VF 8 is now available at a highly competitive MSRP starting at $39,900 for the Eco trim and $44,900 for the Plus trim, with leasing programs beginning as low as $269 per month. It is also eligible for an attractive 0% interest financing offer.
Now, $39,990 for the Eco trim is a bit more than $6,000 less than it used to be last week, but it’s still not super competitive when you look at other options. If you’re purchasing outright, why would you buy a VF 8 Eco for $39,900 when you could buy a Ford Mustang Mach-E Select for the same $39,990 or a Chevrolet Equinox EV for $34,995, both of which offer better range, can use Tesla Superchargers in a pinch, and feel more advanced from their interior materials to their consumer-facing technology? Oh, and that’s before we even get into servicing networks, because Ford and GM have dealerships everywhere.
Even when you look at leasing and financing, adding the numbers up is a struggle. Sure, zero percent financing sounds great until you realize Chevrolet’s running zero percent on leftover 2024 Equinox EVs, Volkswagen’s offering zero percent for 72 months on ID.4s, and Ford’s running 0.9 percent financing for 36 months on the Mach-E.
I appreciate that VinFast still sells cars in North America, what with its tiny market share and the turbulence of tariffs, as the presence of Vietnamese EVs makes the roads weirder and more interesting. However, the brand really needs something either more competitive than the VF 8 or simply way, way cheaper in North America.
Explorer Hits The Trails Again
Back in 2022, Ford put its mainstream three-row crossover in an Otterbox with the Explorer Timberline, a model that lasted three short model years before disappearing. Why kill it? Well, it likely didn’t quite gel with future branding, and a facelift to the standard Explorer in 2025 meant everything else looked new and the Timberline would’ve looked old. However, people still want to drive something that tells the world they go camping on weekends, so the Explorer will soon offer the same Tremor trim level as models like the Maverick, F-150, and Expedition. It’s largely a familiar package, from sensible 18-inch wheels wrapped in all-terrain rubber to auxiliary lighting to exposed tow hooks to some actual underbody protection, but it has been beefed up slightly. New springs help give it a one-inch lift over the standard Explorer compared to the 0.8-inch lift of the Timberline, and new anti-roll bars complement the updated spring rates.
Rounding out the package, Ford’s fitted a Torsen limited-slip rear differential, an interesting choice considering its benefits and limitations. See, a Torsen is a helical limited-slip differential, which works off the premise that you can’t back-drive a worm gear. When one wheel slips, it biases torque across the axle without the need for clutch packs, and does so in a smooth and near-maintenance-free fashion. However, because a Torsen is a torque-biasing differential rather than a locking differential, it needs a load at each half-shaft to avoid just behaving like an open differential. If the Explorer Tremor runs out of articulation and gets a wheel in the air, something like traction control would need to step in and clamp the raised wheel so torque goes to the one on the ground. It’s definitely a setup targeted at on-road and light trail use, which seems appropriate considering these muscled-up Explorers should be a common sight in Starbucks drive-thrus.
You’ll be able to order the 2026 Explorer Timberline with either the 300-horsepower 2.3-liter turbocharged four-cylinder engine or the 400-horsepower three-liter turbocharged V6, with equipment levels ranging from sensible to loaded with toys like massaging seats. A ton of yellow-orange accenting makes it stand out from the rest of the lineup, including the signature Tremor color on the grille, tow hooks, wheels, badges, and stitched into the upholstery. Yep, no way you’ll mistake this for a cop car in your mirror.
What I’m Listening To While Writing TMD
Man, something about “True Lies” off Curren$y’s latest project with Harry Fraud just hits different. Bombastic drums, opulent horns, and the right mix of features to expand the track’s sonic palate while ensuring everyone floats like a Cadillac over that beat. Good stuff.
The Big Question:
Where do you think China’s automotive industry will go in the next ten years? Obviously, it’ll still be big as China is very much the dominant global EV player, but surely this much excess capacity can’t go on forever, right?
Top graphic credit: Chery
The Chinese is really trampling on Indonesia’s car market, they are releasing ev’s and slashing prices to a point where I am certain its predatory pricing, especially on Chery cars, their Tiggo 8 CSH (PHEV) was priced so low, I could not imagine them turning a profit, especially with *ALL* the marketing and dealer expansion they have done, then just a few days ago, they slashed the price off their OMODA E5 (BEV) by a good chunk of 15%, ABSOLUTELY, screwing previous buyers, and used car dealers who mostly got them with very low miles. I genuinely don’t know how low their prices will go, and how well they will hold up.
I don’t know what they’re like to drive or own, but recent gens of the Ford Explorer aren’t bad looking for what they are. The LAPD uses them almost exclusively, though I’m not sure if they’re actual Explorers or Explorer bodies on Taurus/500 chassis (that was a thing for cop cars, right?). Of course, the LAPD rides aren’t as fancy as civilian Explorers. I know that a recent gen of the Exporer was RWD, which was probably nice, and I seem to recall reading somewhere that the fast Explorer ST actually MSRPd for more than a base Corvette at one point a few yeas back. Since it’s not something I’m really super-interested in, my knowledge of Ford SUVs is incomplete and dated.
There are lots of other SUVs I’d rather own than one of these, but aesthetically at least, they’re not awful. Same for Range Rover offerings… I’d never want to own one, but they’re easy on the eyes.
Of course, if I were buying one myself, I’d just get a Mazda CX-5 and probably drive it for years w/o regret. 😉
while i understand fundamentally why dumping is bad for trade and domestic manufacturers. theres this little part of me that thinks this is kind of a win? would an affordable car really be such a bad thing even if it came from china?? US automakers have basically abandoned affordable economic automobiles, wich the USA was the first to even make an automobile affordable for the ‘every-man’! it took Germany almost 40 years to release their “people’s car” after the model T was released. it’s 100 years later and ‘new’ automobiles are slowly becoming only obtainable to the upper class. Maybe ‘protectionism’ is not a good thing for the people when it comes to transportation? Maybe the us automakers should adapt or die. its funny to me how capitalism is survival of the fittest unless your a special interest group with a lot of cash to pay to lobby congress…..
I take your reasoning Bassracerx, but I presume the objection would be the same as it is for all subsidized enterprises: it represents unfair competition, undercutting domestic manufacturers from competing in that market segment. Of course you’re right that no American auto manufacturer chooses to really compete in the entry-level/economy segment on the market, so yes, from a consumer/present POV, being able to buy a cheap Chinese EV or ICE car would be a positive thing.
I don’t think it’s likely to happen here anytime soon, be it a net gain or loss for builders or buyers in the long run.
Maybe tariffs on Chinese cars is actually a really good idea for now. They could snuff out any countries domestic production and then secure the whole market otherwise.
I believe us automakers could make vehicles less expensive. Get rid of dealers, focus on costs and quality. Make more parts in house. streamline production facilities so that parts are made in closer proximity to the final assembly plant. There is just no incentive to do that right now because automakers can push the increased costs to the consumers and they will pay it because … what other car are they going to buy??? Also selling the car for less means LESS profits which capitalism is allergic to because stock number must ALWAYS go up. profit must ALWAYS be more next year than this year.
China has everything they need to build a car on one city block. where the us has all the bits made all over the country or overseas and shipped to the assembly plant. many of the parts are even made in china.
About a month ago, actually, when I saw one with my own eyes moving under its own power down I-5 in Southern California. Which means I have seen a VinFast (and a Pagani) out on the streets but still have yet to see an Arteon (seriously).
I’d say most, if not all of the startups will die off and have their remains scooped up by the established Chinese players. NETA just imploded spectacularly and their unfinished business is wreaking havoc all over the country (shuttered service centres, unpaid wages, dried up spares). NIO isn’t looking good financially, and CATL’s trying to one-up them with their own battery-swap ecosystem, and most of the state-owned brands have already signed up, so things aren’t looking too bright.
There’ll still be small automakers though, but most of them would be badly-performing state-owned brands; barely selling cars and kept afloat by massive subsidies by their own local provincial governments. My hometown used to have its own automaker (Soueast), who bought the rights to the 5th-gen Lancer and squeezed out every last bit of value from that platform, churning out vans, hatchbacks, sedans, SUVs, all based on Mitsubishis. Sales were meager at best, and to prop it up the local government started hoarding Soueast cars like crazy! There were Lancer cop cars, Lancer postal carriers, Lancer airport apron cars, Lancer taxis, Lancer learner cars and on and on. If the car belonged to the government, it was probably a Lancer.
Eventually the Lancer-tech got outdated, sales plummeted, Covid hit and Soueast went down hard. Investors backed out, and in an act of desperation the local government ended up owning 70% of Soueast. Now all they do is make Jetour soft-roaders for Chery, and the brand is all but gone, only hanging on as an employment program for the locals. And I’d say this would be the likely end for many Chinese brands.
I am delighted every time I see a Vinfast in the wild. I gleefully say “somebody bought one!”
I mean, I wouldn’t, and I wouldn’t suggest anyone else do it either, but they still brighten my day with their terrible choices.
There’s one I fairly often in my office garage, unfortunately I’ve not yet figured out who owns it- I’m definitely curious as to their thoughts on the car.
Dude I saw one on the interstate last week! I freaked out!
That’s what I think when I see the 1 matte blue Fisker Ocean I see around me
Last time I was in Vancouver I saw a Fisker Ocean – a black one – and I was so excited that I had to take a picture.
And then explain to my boyfriend why a normal-looking mid-sized SUV was exciting.
Torsen seems like an odd choice for the Explorer. Ford has had e-diff that brakes individual wheels to (more or less) replicate the action of an LSD for years (my Focus ST had it). With something that is very likely to have a wheel off the ground, that would appear to be the better (and cheaper) solution unless they’re using it in conjunction with the torsen.
you can have both. a brake based and a torsion. the software will probably just wait for the off the ground tire to rotate a few revolutions and t hen it will pulse the brakes on the outside wheel to send torque to the other one. Torsions are great because they are passive and just work in the background keeping you out of trouble. The brake based system is only reactive it has to sense you are slipping and sliding first before it can engage.
Yeah, it would smart if they use them both, though I don’t know if that’s the case. I like the Torsens lack of maintenance, though I prefer the feel of VLSDs, but any are better than an open diff.
I’m of the opinion a lsd should be standard, and torsen should be locked to sports cars. Even a STi lift wheels too often in normal use. Lifting a tire makes breaking a torsen easier, while it’s not working.
Maybe you live in a land where every ditch is covered, but I didn’t. I grew up where dropping a wheel off hard pack is normal, and pavement is about 2 roads ago before your driveway.
Just wondering I read an auto transportation ship carrying hundreds of Chinese new junk EVs caught on fire sank the ship and is now an environmental disaster. Perhaps another reason Chinese crap should not be celebrated but banned. BTW if they sell a new as used do they show new sales and used sales on the same car?
The Reuters quote certainly implies double dipping, reporting that “the transaction value is double that of new and used-car purchases.”
the funny thing is not all chinease cars are crap. many of them are excellent and class leading. the CEO of ford imported a chinease car for testing and he is famous for saying its his favorite car he’s ever driven and he refuses to give it up. also china is not the first car maker to have vehicle fires at sea it happens all the time with the other automakers.
“china only makes junk” rhetoric is very outdated. consumers just tend to gravitate to the junk products because they want everything for nothing. But china has been manufacturing so long they have gotten quite good at it. they can make expensive/quality items too.