How To Properly Hand Out ‘Global Car Sales Crowns:’ Don’t – Forbes

Posted: Wednesday, January 11, 2017

Vertigo, anyone? Cars awaiting their delivery in Volkswagen’s Autostadt (Photo: Alexander Koerner/Getty Images)

Tis the season when “global sales crowns” are passed-out to automakers. The OEMs usually suffer the coronation without comment. Officially, they don’t care about the ranking. Or so they claim. Hence, you won’t hear them complain when the crowns are passed out to the wrong automaker, as it happened in the past. To avoid repeated offenses, here a short primer on car counting. This year, two carmakers, Toyota and Volkswagen, are in extremely tight contention, and with an impending photo-finish, exacting work has become more important than ever.

Volkswagen does not report “sales.” The company reports “deliveries to customers.” To the untrained eye, that may look like sales to end-users, but it is not. Volkswagen generally does not sell to end-users; its customers are dealers and importers. At Volkswagen, once a car has passed count point 8, or ZP8 in VW parlance, it is counted as delivered to a Volkswagen customer, never mind how long it will sit on a dealer lot before it finally will turn into a real sale to the end-user. There is nothing nefarious to this practice. It is accepted throughout the world, and it makes sense. As far as the automaker is concerned, the car is delivered. Whether it’s “sold” is subject to interpretation.

Toyota reports according to the Japanese system, which provides two data points: “Production,” and “sales.” Toyota’s production number represents the finished cars that left the factory. Toyota’s sales number “generally reflects final sales to end-users,” its Tokyo-based spokesperson Kayo Doi confirmed to me today. Sticklers for detail as they are at Toyota, the “generally” qualifier was added to account for loaner cars, and other statistical vagaries in this business. For the visually inclined, Toyota routinely provides a handy chart, at the end of this document.

Should you have followed me to here without falling asleep, you will agree that Volkswagen’s “deliveries” are more or less the same as Toyota’s “production.” This is the method I am using when covering the World’s Largest Automakers in Forbes. I have discussed this with spokespeople of both companies, and they concurred. It would be a crime on car statistics to conflate Volkswagen’s “deliveries” with Toyota’s “sales.” Please don’t.

Sure, we would love to know how many cars are really “sold” to the end-user, but that number generally is not made available by carmakers outside of Japan. The best way to gauge sales would be to count new car registrations, as it is done in Europe and Japan. At least in Europe, these data have become victim of rampant “self-registrations.” In the U.S., ‘sales reporting abuses” have made car sales statistics suspect.

For that reason, the world automaker umbrella organization OICA, generally accepted as the last word in global automobile stats, ranks automakers by production, and not by sales. Of course we are free to rank automakers any way we please, but if we hand out “sales crowns,” we ought to get sales data, which Volkswagen does not provide.

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