General Motors Sales Reports in China Aren’t Addressed To Car Dealers

Following the footsteps of competitors, GM is reporting car sales data to consumers.

A growing trend has been identified among automotive manufacturers in China:  As the global market slows due to economic cooling,  carmakers are starting to report retail car sales rather than wholesale delivery data.  General Motors (GM) is the most recent company to offer wholesale delivery reporting.

GM recently released an April sales report revealing retail sales made with Chinese consumers, not with automotive dealers as it has formerly done.  The Japanese-owned Honda Motor Company also released retail sales reporting information for April 2015.  Meanwhile, the Nissan Motor Company has been offering retail sales reporting data since January 2015.

Wholesale Passenger Vehicle Sales Climb

Wholesale passenger vehicle sales have climbed roughly 3.7% as of April 2015 when compared to sales in April 2014.  While a percentage increase might seem positive, the 3.7% increase is a number that is revealing  slowing sales over the last two years.  The reduction in the amount of successful vehicle sales is creating a tension-filled environment between car dealers and automakers. Car lots are beginning to fill up with vehicles that just aren’t selling.

According to John Zeng, LMC Automotive’s Director, China’s auto sellers will now have to learn how to look at the market in a new way: by the number of successful transactions between customers and sellers.

The Asia-based McKinsey & Company automotive team has identified a power shift between car manufacturers and sellers.  According to Paul Gao, the head of the consulting company, car manufacturers had the upper hand when car sales were so high the sales numbers were in the double digit percentiles. Car sellers were happy to accommodate manufacturer demands as incentives were involved.  As per reports from the China Automobile Dealers’ Association (CADA), an assessment of vehicle inventory at the conclusion of March reveals an inventory level of 1.77 months.  The latter figure is a clear 28% increase the same month a year earlier.  Automotive consulting companies in China identify 1.5 months of vehicle sales as a concern, going as far as to call it an “alert level.”

According to GM, the company uses the retail reporting method on a global scale. However, automotive analysts caution that car makers may define the type of reporting they do differently.  The best method for sales accuracy verification is to run a comparison between vehicular registration and car sales reports.  Such verification processes are possible in the US, where registration information is publicly accessible. The same is true in Japan, which already compares sales to vehicular registrations.

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