economy - Spin masters at the auto show

A happier Shanghai model in 2003

Models were out in full force against at the Shanghai auto show, held this week. I failed to attend, although those shows are more fun when an industry faces a crisis. Fortunately, my AFP-colleague noted some of the more interesting comments, although he failed to translate them into more proper English.

Volkswagen Group China president Brend Leissner said the German carmaker would no longer slash prices on its models to boost sales and instead would seek to cut costs by streamlining operations.

Well, if that would have been such a smart strategy, why did Volkswagen not apply this earlier? In fact all car producers have been saying the same thing in the past years, to do just the opposite. Just wait for more price cuts.

At the same time, Leissner insisted that Volkswagen's performance in China was better than industry figures indicated, putting its first quarter market share at 18.9 per cent instead of the roughly 11 per cent given.
The discrepancy, he said, lay in a change in reporting methods with sales to end-customers recorded instead of sales to dealers. Only a few years ago VW had 40 per cent and more of the market.

This answer deserve a price for the best spin of the show. Why has Volkswagen not earlier complained about the way car sales in China? You only use this trick when you are losing in a market.

In 2005, China vehicle sales are forecast to rise 10-15 per cent, still strong growth but down from 15 per cent last year and a far cry from the heady 75 per cent rates seen in 2003.

Of course, even a rise of ten percent is much more than what car producers in reality expect. But at an auto show, you cannot faces that grim reality.

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