Volvo Reports Sales Distortions in China image

Volvo changed the incentive program for the Chinese dealers as it discovered big sales figures distortions.

In 2012 Volvo’s sales in China dropped 11%, according to a press release, but now the automaker said that it discovered big sales figures distortions and that sales actually increased as 2011 sales data was overstated. A Volvo spokesman said that the dealers didn’t ‘cheat’ as they made sales under the old incentive programme which offered bonuses based on sales to customers and that the sales figures had no impact on the automaker’s earnings.

According to Chinese auto analysts sales figures are often distorted as they are based on dealer reports and not on actual vehicle registrations, a fact which affects other automakers too. According to Reuters, the Swedish automaker was expected to report sales of 39,871 units in 2011 in China and not 47,140 units, while in 2012 the automaker reported sales of 41,989 units, instead of the expected 45,896 units.

Although all Volvo sales figures were accurate since mid-2012, year-on-year comparisons were distorted, including the January increase of 75% in China. All in all, Volvo’s sales in China are far behind its target of 200,000 units annually by 2015 and the automaker has lost ground to rivals such as BMW and Audi.