Geely-owned Volvo has uncovered what Reuters calls “widespread cheating by its car dealers in China.†Dealers inflated sales to win cash rebates for meeting targets.
Geely-owned Volvo has uncovered what Reuters calls “widespread cheating by its car dealers in China.†Dealers inflated sales to win cash rebates for meeting targets. An investigation found thousands of fake sales booked in 2011. In order to make books balance, 2012 sales were under reported.
Volvo had reported an 11-percent drop in 2012 sales in China, According to the investigation, sales actually rose by 15 percent from a year earlier. “Half of the dealers” are said to have been involved in the caper.
Volvo spokesman Per-Åke Fröberg, asked by Reuters, did not want to use the word “cheating†and preferred “a retail delivery transparency issue†instead.
Fröberg said the issue should have “no effect on Volvo’s earnings whatsoever”, as earnings and financial results were based on wholesale deliveries. He said Volvo did not plan to adjust historic sales figures in China.
If fraud on such massive scale does not get caught for more than a year, one wonders how correct other numbers are. In Europe and Japan, actual registrations are counted. In China and the U.S. , sales are reported by manufacturers and dealers.