Friday, February 6, 2009

China Didn't Really Surpass the US in Auto Sales

Over the past few days we've been treated to a lot of stories about how China's auto sales surpassed those of the US for the first time ever during the month of January. (Here are a couple: China Daily, WSJ.)

Yesterday I mentioned this to a scholar from Beijing who, without the least hesitation, expressed skepticism about the numbers. "Do the comparisons cover the same types of vehicles?" I was asked.

We can thank the Financial Times for finally getting to the bottom of this issue. One important detail that I had failed to note earlier was that the original source of this story was none other than General Motors.

"It's not apples to apples," one industry source said yesterday. GM's estimate for Chinese sales includes all vehicles, including passenger cars, commercial vehicles, trucks and buses. Its US figure excludes everything except passenger cars, pick-up trucks and sport utility vehicles.

Figures from JD Power, the auto consultancy, demonstrate why the comparison is so misleading. JD Power says China produced 9.3m vehicles in 2008 - but 2.8m of those were light commercial vehicles and nearly 900,000 were medium and heavy vehicles, categories not included in GM's US totals.

Just an assumption here, but I'm guessing that GM's analysts have become pretty skilled at comparing their numbers to those of other automakers over the years. The fact that they could make such a mistake is puzzling. Could it have been intentional?