Toyota made headlines today, as Volkswagen surpassed the Japanese automaker in half year sales and production. Actually, it’s old news. VW had edged past TMC in May already. And the distance between the two has narrowed in June. And then, there’s UBAR.
|World’s Largest Automakers|
|6 Month 2015|
|Jan-Jun 2015||Jan-Jun 2014||YoY||2015 proj.|
|Source: Company data. GM, VW: Deliveries. Toyota: Production. Blue: Estimate|
Projecting Jan-June data out towards the end of the year, Volkswagen will be 53,000 units ahead of Toyota, if both maintain their current trajectories. When we did the exercise last month, the projection had Volkswagen 200,000 units ahead of Toyota. What happened?
|Volkswagen Group June 2015|
|Region||June’15||June’14||YoY||Jan-June 15||Jan-June 14||YoY|
China is Volkswagen’s largest market, about three times the size of VW’s home market Germany. Volkswagen Group deliveries in China were down 17 percent in June. For the first six months of the year, VW’s China business is down 4 percent. That according to the official numbers.
Data in China can be quite oblique, and it’s easy to goose your numbers without anybody noticing. If the usually reliable Wolfsburg sources are right, VW’s China sales have been goosed for years, and to the tune of 60,000 to 100,000 units per annum. This being a German company, there even is a line item for inflated sales, with its own acronym. “They book the fake China sales as UBAR,” tells me a Wolfsburg informant. UBAR stands for “Unsold, But AAK Reported,” he says. AAK is VW speak for Auslieferungen an Kunden, or deliveries to customers. UBAR are made-up deliveries to customers.
While goosed numbers may maintain bragging rights, at the end of the year, it’s the bottom line that counts. Volkswagen and GM have built a lot of capacity into the Chinese landscape, and unused capacity can be a ROIal pain. Toyota on the other hand had called a plant building moratorium years ago. In April, Toyota announced that it will build its first new plants in China and Mexico, where they will be ready in around 2018/2019. Until then, TMC will make do with current capacities. With the global auto market in negative territory, Toyota has called peak car perfectly.
Note: Dailykanban.com tracks production, not sales, because this is how the world automaker umbrella organization OICA ranks automakers.
Toyota reports both sales and production, we take production. Volkswagen reports “deliveries” to wholesale – which is, at least for this exercise, close enough to production. GM did the same, but begun reporting retail sales for the Chinese market.