Are We Getting Snowed By Fake Data From China?

With China being the world's largest car market, and the largest market of many of our carmakers, getting good and timely data is essential for stock analysts and journalists alike. Bloomberg has an exasperated story that cries about the absolute mess in China when it comes to hard data. It also describes the great lengths analysts go to when gauging Chinese car sales. No wonder the analyst reports are often messier than even the messiest Chinese data: "Yankun Hou, an award-winning auto industry analyst at UBS AG (UBSN), counts Toyotas and BMWs in the parking lots of car factories in China using satellite images from Google Maps to gauge inventory buildups." TTAC says: No a good idea. Google Maps is highly unreliable in China, with maps off by 100 yards or more. "Scott Laprise at CLSA Asia Pacific Markets said he pretends to be a customer and takes snapshots of showrooms with his BlackBerry to gauge retail demand." TTAC says: Just watch for the salesmen flashing Vs with their fingers while grinning into the camera. "At Mizuho Financial Group Inc., Jeremy Yeo checks order flows at auto parts manufacturers." TTAC says: Better, but parts manufacturers are secretive. I often asked why they don't show their wares on-line, only to receive as an answer: "Oh, no. Then the competition would know what we are doing." "Erwin Sanft at BNP Paribas SA (BNP) oversees a monthly survey of 70 dealerships across China." TTAC says: That seems to be the best idea. However, see parts manufacturers. The article complains about the well-known fact that reliable data is very hard to come by in China. True. "Analysts and economists have complained that China's numbers are opaque and that the country's growth figures may be overstated." True. "With cars, one complaint is that unlike the U.S., Germany and Japan, China doesn't release figures on private car registrations." Not true. Germany and Japan release data based on true registrations (not just private) as compiled by the governments. Just like in China, U.S. sales data are based on reports from automakers. These reports are known to have their issues. (U.S. data compiled by the DMVs are available, but usually with a lot of delay, and nobody bothers.) Bloomberg goes on to suggest that China should release data based on official registration data. Good idea. For a while, the China Automotive Technology and Research Center (CATARC) released monthly data that allegedly were based on registration data compiled by the Public Security Bureaus (PSB) that are in charge of auto registrations in China. CATARC made headlines because their numbers were released a week in advance of the usually laggardly China Association of Automobile Manufacturers (CAAM). However, CATARC data were vastly different from the CAAM data. After months of confusion, CATARC was told to shut up and release no more. The odd thing is that Bloomberg was a big fan of CATARC, back in 2010. Forgot so fast?   from The Truth About Cars http://www.thetruthaboutcars.com

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