China’s Inflated Automobile Sales Numbers

Commentary

It has been an accepted fact that China sold 18 million automobiles in 2010, topping the world for the 2nd consecutive year.

That number, which was provided by China Association of Automobile Manufacturers (CAAM), seems to be inflated, maybe by a big margin.

The quasi-government association, which collects output and sales figures from members on a monthly basis, made an unprecedented decision recently to list the May sales number of Hawtai’s B11 sedan as zero.

CAAM claims that the privately owned automaker headquartered in Beijing has been rampantly inflating its output and sales numbers since 2008.

According to vehicle registration numbers tallied by the Ministry of Public Security (MPS), which operates the country’s registry of motor vehicles, Hawtai has sold only 45,000 SUVs to end users since 2008.

But the numbers submitted to CAAM added up to 183,000, or four times the registration number.

The automaker, which makes SUVs and cars at two assembly plants in Rongcheng, Shandong Province and Erdos, Inner Mongolia, sold 15,950 vehicles to end users in 2010, according to MPS. But the number it gave CAAM was a whopping 81,435 units.

Hawtai claims that it sold 3,000 units of its newly launched mid-level sedan, the B11, in the first four months of 2011. But registered B11s in the period was only 100 units.

Bo Yonghua, Hawtai Automobile Sales Co. vice president, was quoted by a local newspaper as saying that the company’s sales number of the B11 submitted to CAAM had been accurate.

But the sad situation is that Hawtai’s practice is not alone.

When asked to confirm if CAAM’s sanction of Hawtai is well founded, a top executive who recently left Hawtai told me: “Who doesn’t inflate numbers in China?!”

If this is true, then China’s 18 million automobiles sold in 2010 could very well have been inflated significantly.

In a system where automobile output and sales are submitted by individual automakers to a trade association, it is impossible to have accurate and reliable statistics.

The only accurate sales numbers are naturally vehicle registrations by end users when they get license plates. Unfortunately for China, vehicle registration data is now monopolized by the MPS because it helps generate hundreds of millions of RMB yuan in subscription sales to leading automakers.

Until such public data can be accessed free of charge by the general public, output and sales statistics from other sources must be looked at with a grain of salt.

China Automotive Review