China’s Ministry of Industry and Information Technology is preparing rules that would prohibit the resale of passenger vehicles within six months of their initial registration, according to an editorial in Auto Review, a publication of the China Association of Automobile Manufacturers. The measure targets the growing trade in so-called “zero-mileage” used cars—new vehicles that are briefly insured and licensed so automakers and dealers can book them as sales while the cars never leave the lot. The practice has proliferated amid an extended price war and chronic overcapacity in the world’s largest auto market, creating headaches for consumers who later discover their “new” cars are legally second-hand and often ineligible for certain subsidies or financing. Great Wall Motor Chief Executive Wei Jianjun publicly criticized the tactic in May, prompting louder calls for government intervention. Under the proposal, dealers that violate the six-month rule could face penalties from both regulators and manufacturers. Automakers including Chery and BYD have signaled they will hold dealers accountable for prematurely registering vehicles. The China Automobile Dealers Association has separately floated a coding system to track used-car exports, underscoring broader efforts by Beijing to curb what it calls “irrational” competition in the domestic auto industry.