Auto Industry Catfight! GM Number One? Volkswagen Number One?

Usually, carmakers officially claim that the worldwide ranking is not important at all. Unofficially, number one is of course preferred to also-ran, and some number cosmetics are par for the course. Remember the catfight between BMW and Mercedes? One company however admits openly what others are trying to hide: For years, Volkswagen wanted to be number one by 2018. It seems that VW is tired of waiting. According to media reports, Volkswagen claims the No. 1 title for 2011. Let’s investigate.

Yesterday, GM announced global sales numbers of 9,025,942. GM did so by hiding a table like an Easter egg in the bottom of a Chevrolet sales report. This announcement took industry watchers by surprise. Usually, GM publishes global sales data in its quarterly report. The Q4 and year end report of GM is due some time in February.

GM`s Global Sales 2011

GM 2011

2011 Global Sales Main Volkswagen Brands (Millions)

Alerted by the New York Times, which did read the Chevrolet report all the way to the end, and which promptly bestowed the title “world’s largest automaker in 2011” on GM, the rest of the media joined the crowning ceremony.

GM is a reluctant king. Contacts inside of GM confirm that the company never claimed the top spot, and that the new GM wants to forget all boasting with sales records. Easy for them to say. While Toyota was number one, the party line at Koraku 1-Chome 4-18, Bunkyo-Ku, Tokyo, was: “We don’t want to be number one in the world. We want to be number one with our customers.” The “yeah, sure” now goes to the RenCen, where GM spokesman Jim Cain says “Our goal is to be the best, not necessarily the biggest.”

Today, Volkswagen, not a friend of coquettish talk, was heard. A Volkswagen spokesman criticized vis-a-vis the Wall Street Journal that “Volkswagen’s figures don’t include the contributions of majority-ownership stakes in truck makers MAN SE and Scania AB, which will be added in a few weeks.”

The WSJ promptly turned that into “shortly after GM’s disclosure, Volkswagen argued it, in fact, was the top-seller last year if sales of its affiliates are included.” The WSJ thinks that “the truck makers might add 200,000 vehicles to VW’s sales total.”

Smelling blood, or at least another catfight, that report was promptly picked up by everybody from Motor Trend to Automobile Magazine, which, without using mental math or calculator, said that Volkswagen could be first. Where do they teach that kind of new math?

If you add 200,000 trucks made by MAN and Scania to Volkswagen’s 8.16 million total, then you get 8.36 million. Where I went to school, it was drummed into me that this is some 670,000 less than the 9.03 million reported by GM, and hence not enough for the title. That niggling fact is glossed over in the news reports.

The annoying part is that Automotive News [sub], which really should know better, also says that “Volkswagen Group believes it should be No. 1.” The industry rag faithfully prints that GM sold 9.03 million, that “Volkswagen sold 8.16 million” and that, this one sounds familiar, ”the truckmakers might add 200,000 vehicles to VW’s sales total.” Not one single time does AN raise a hand and says: “Wait a minute.”

Occasionally, one can feel that the writers are getting a bit uncomfortable with a story that does not compute. But nobody speaks up. Instead of saying that 8.36 million are not good enough, old standby Wuling is being trotted out. Wuling sales of over 1 million, AN complains meekly, “are excluded from GM’s total by some analysts because GM doesn’t have a controlling stake in its partner.”

They can exclude that all day long, but it does not matter more than any other analysts guesses.

Nowhere does it say that an automaker must have a controlling interest to recognize sales numbers. Hyundai for instance reports together with Kia, despite the fact that Hyundai has fewer shares in Kia than when they were counted separate. GM currently has no “controlling stake” in any of its joint ventures in China. Will those anonymous analysts take away the 2,547,171 units GM reports as sold in China in 2011? The counting of Wulings may make people uncomfortable, but GM has a contract that allows the recognition of 100 percent of all of the Wuling sales.

As they clearly don’t teach car counting in J-school, the members of the media are referred to our car counting 101 course, which we had republished again in November in observance of Bloomberg’s premature crowning of Volkswagen as number one.

Capsule version: The sales king won’t be crowned by the media. The king will be declared by OICA, the umbrella organization of the automotive industry. OICA bases its list on numbers reported by the manufacturers. If Volkswagen reports 8.36 million, then this is what the number will be. If GM reports more than 9 million, then it will be more.

The alleged “auto-industry dust-up over how to count affiliate sales” reported by the WSJ is an invention of mathematically challenged journalists. If Volkswagen complains that someone forgot to count Scania and MAN, it is directed at mathematically challenged journalists.

They didn’t even notice.