Volvo Dealers Caught Cooking the Books in China

Share Our Knowledge With Your Friends, Contacts And Co-Workers

Volvo China recently uncovered a network of dealers who were actively reporting higher than reality sales to the Volvo China Headquarters in a bid to gain cash rebates from the Swedish brand according to a Reuters report issued on Friday:


Swedish auto maker Volvo has uncovered widespread cheating by its car dealers in China, where retailers inflated sales to win cash rebates from the company for hitting volume targets.

An investigation by the struggling, Chinese-owned car maker uncovered thousands of fake sales booked in 2011 — but also an under-reporting of sales in 2012 to make the books balance. That meant it actually performed better last year than it had thought, according to a senior Volvo executive.

The executive asked for anonymity because of the sensitivity surrounding the findings of the recent investigation.

Volvo Car Corp., wholly owned by China’s Zhejiang Geely Holding Group Co. GEELY.UL since 2010, had reported an 11-percent slide in 2012 sales in China, fuelling doubts over its ambitious strategy for the key growth market.

In fact, sales rose — by 15 percent from a year earlier — after it uncovered what the senior Volvo executive described as “widespread falsifying” of retail sales volume by a number of its Chinese dealers. He said his best estimate was “half of the dealers” were involved in falsifying retail sales volume.

A Volvo spokesman acknowledged the company had discovered a “transparency issue” with the reporting of sales, but said it would not hurt earnings.

Volvo told dealers in its network of 151 retail sales outlets in China earlier this month that it had begun cracking down on the sales-inflating practices. The message was delivered at a meeting in Taipei on March 7 as part of an internal presentation on the state of its business. Reuters has viewed the presentation slides Volvo used in the Taipei meeting.

“We believe we fixed the problem, but it was a painful process,” the senior Volvo executive told Reuters.

He said the over-reporting of sales by dealers made it hard for Volvo to assess the popularity of models and made the automaker less responsive to swings in demand for its cars — in some cases forcing the company to over-deliver to showrooms.

However, there was little material impact on Volvo’s bottom line, he said, since the company books sales when it ships cars to dealers, not when consumers buy the vehicles at dealerships.

About the author  ⁄ Ash

China Car Times is the number one portal for the latest information, statistics, and industry information on the Chinese automotive industry. Over the past six years of operation we have seen the Chinese auto market grow from a backwater of old European models to the world's largest auto market with the world's leading technology being delivered here first. You can connect with China Car Times founder and Editor Ash Sutcliffe by clicking on the Linkedin logo, you can also follow us on Twitter, Facebook and Google Plus via the relevant icons

No Comments

Leave a Comment

See News by Industry
Industry News China Green Auto News Spy Shots China Auto Culture
See News By Brand
Acura China Acura China Aston Martin China Aston Martin Audi China,FAW-Audi Audi China
Baojun Auto Baojun Beijing Auto Beijing Auto Group Beijing Auto Beijing Auto
Besturn Auto, FAW Besturn Besturn BMW China BMW China Brilliance Auto Brilliance Auto
Buick China Buick China Baojun Auto BYD Baojun Auto Cadillac
Changa,Chang'an Chang'an - Chana Changfeng Changfeng Changhe Auto Changhe
Chery Auto Chery Chevrolet China Chevrolet Chevrolet China Chrysler
Citroen China Citroen Dodge China Dodge Dodge China Citroen DS
Dongfeng Auto Dongfeng Geely Emgrand Emgrand Geely Emgrand Englon
FAW,First Automobile Works FAW Ferrari China Ferrari Fiat China Fiat
Foday Auto Foday Ford China,Changan-Ford Ford Guangzhou Auto Guangzhou Auto
Geely Auto Geely Geely Auto Gleagle GoNow Auto GoNow
Great Wall Great Wall Hafei Auto Hafei Haima Haima
Hawtai Hawtai Honda Honda Huanghai Yellow Sea Auto Huanghai (Yellow Sea)
Hyundai China Hyundai Infiniti China Infiniti JAC China JAC
Jaguar Jaguar Jinbei Jinbei JMC JMC
Kia Kia     Jaguar Land Rover
Landwind Landwind Lexus China Lexus Lifan Auto Lifan
Lincoln Lincoln Youngman Lotus Youngman Lotus Luxgen Luxgen
Mazda Mazda Mercedes China Mercedes MG - Morris Garages MG
MINI China MINI Mitsubishi China Mitsubishi Nissan China Nissan
Opel China Opel Opel China Peugeot Reely China Reely
Renault Riich Riich Riich Roewe
Rolls-Royce China Rolls-Royce SEAT SEAT Senova Senova/ShenBao
Double Ring Double Ring - Shuang Huan Sichuan Yema Sichuan Yema Skoda Skoda
Double Ring Smart Subaru Subaru Suzuki Suzuki
Toyota Toyota Volvo Volvo Volkswagen Volkswagen
Zotye Zotye   Others    
Sign up today to receive China Car Times weekly newsletter!
Your name
Your email