China auto Aug13

China’s state media have published major revisions to reported auto sales data for H1, and for the equivalent period in 2012.  As far as the blog knows, these have not been noticed elsewhere, so it seems worth providing more detail on the changes that have been made.  Auto sales are a vitally important market, and these changes are quite significant, revising down the original numbers by 9%.

The original official monthly sales reports through April were as follows:

  • January sales were reported as having “accelerated due to strong demand” to record monthly sales of 1.7m
  • February sales then dropped due to the Lunar New Year holiday, but were still over 1 million
  • March sales were said to have recovered strongly, however, at 1.46m, whilst April sales were reported up 17% at 1.34m

The chart shows the new data, which revise down H1 2013 and H1 2012 data quite significantly:

  • They report Q1 sales 10% lower at 3.76m versus 4.2m before (red square); Q1 2012 is reduced by 9% to 3.1m (green line)
  • H1 data is reported down 9% at 7.47m versus the original 8.2m; H1 2012 is also revised down by 9% to 6.4m versus 7m reported earlier
  • Presumably monthly data for H2 2012 will also be revised down, but for the moment we shall just have to wait and see

The new data also shows H1 sales fell 1% in H1 2011 versus 2010, and by 2% in H1 2012 versus 2011.  The 18% increase for H1 2013 versus 2012 is thus revised down to 15% – still a healthy figure, of course.

We do not know why the new data is now being published in the state-owned journals.  It comes from LMC automotive and seems to be a welcome attempt to define actual retail sales for the first time.  This would be a major change from the previous reports based on data from China’s Passenger Car Association, which equated factory output to actual sales.  Certainly the more detailed data quality suggests this may be at least partly a cause, as it provides a breakdown by brand, manufacturer and segment for the first time.

The changes are a healthy reminder that data quality and disclosure principles in China does not meet normal Western standards.  They also remind us that it is unwise to take any published Chinese data, including GDP growth, at face value.