"China has the capacity to make its automobile industry the largest in the world, and it should also strive to make its automobile data statistics and analysis the most objective and scientific."
Author: Cheng Zhenbiao
Editor: Ge Bangning
Produced by: Bangning Studio (gbngzs)

Time flies, and in the blink of an eye, we find ourselves at the crossroads of bidding farewell to the old year and welcoming the new. The automotive industry, particularly the media sector, eagerly anticipates the release of various annual sales figures.

With over half a century of experience in the industry, the author has long noticed a tendency within the automotive sector to place excessive emphasis on production and sales volumes, while neglecting or overlooking the operational quality encompassed by the broader concept of quality. This includes data on value, output, profit, technology, and more. The industry, in particular, has a "penchant" for sales figures, which are often released ahead of other data and used to rank and position automobile companies.

The author does not harbor animosity towards sales data. Undoubtedly, quantitative data holds significance and can shed light on numerous issues. However, it is challenging to explain all issues, and in many instances, it may fail to address the core problems.

For example, on the market, although all vehicles may appear identical to the naked eye, their intrinsic quality and prices can vary significantly, and the value generated for manufacturers can differ markedly. A vehicle with high technological content, superior quality, and safety and reliability may be worth twice as much or even more than a vehicle that is vastly inferior.

From this perspective, different vehicles may all be recorded as having sold xxx units on the surface. However, upon deeper examination, the actual value created by each manufacturer and the contributions made to the country and society can vary greatly. To facilitate comprehension, the author presents a qualitative formula: S = D × Q × N.

Where S represents the total product value or benefits, utilities, etc. D stands for the unit product price (value, benefits, or utilities of a single product). Q is the (broad) quality coefficient; if the quality is qualified and defect-free, then Q equals 1; if there are defects or it is unqualified, then Q is less than 1 or zero; for scrap products, Q is negative. N represents the product sales volume.

From the above formula, it is evident that quality holds immense significance for an automobile company to achieve better and more robust performance. There is much work to be done in this regard, and the potential is vast. Automobile companies do not have to rely solely on expanding production and increasing sales volume.

In addition to the aforementioned theoretical understanding, the current macroeconomic backdrop and overall situation also necessitate that the automotive industry promptly shifts its mindset, transitioning from past extensive growth to high-quality development in this new stage.

From the Reform and Opening-up period to the early 21st century, China's economy has experienced decades of rapid development, significantly bolstering national strength and markedly improving people's living standards. Essentially, the issue of "availability" has been resolved. In recent years, adhering to a series of new development concepts, the Party and the state have promptly assessed the situation and adjusted the annual national GDP growth rate from high-speed to medium-high-speed. Until now, it has been further refined to approximately 5%, shifting the focus to resolving the issue of "quality" in the economic and social spheres (especially people's livelihoods).

The automotive industry has generally followed this development trajectory. In terms of some quantitative scales, this industry has surpassed the overall level of national economic development. Today, China has emerged as an absolute automotive powerhouse globally, with production, sales, and ownership volumes each accounting for roughly one-third of the global total. The automobile penetration rate, based on the actual (or genuine, rather than nominal) per-thousand-person ownership, has reached (or is equivalent to) the level of moderately developed countries worldwide.

The absolute values of data related to China's automobile scale are already substantial. In terms of domestic market capacity alone, automobile production capacity and sales volume are already showing signs of overcapacity, making it challenging to support further large-scale expansion. Therefore, only two paths are viable:

First, on the basis of the existing quantity, enhance quality and efficiency to obtain (or create) more value (benefits) with the same amount, making greater contributions to national and social development. Second, look outward and seek greater development and markets overseas.

It is particularly crucial to note that whether domestically or internationally, Chinese automobiles must prioritize quality and safety. Especially in overseas markets, although opportunities abound, challenges are also significant. Requirements for product quality, safety, reliability, environmental protection, and other aspects may be even more stringent. Automobile companies must exert even greater effort to succeed.

Based on the above analysis, at this opportune juncture, the author suggests that relevant departments and institutions in the automotive industry should adopt an innovative spirit to reform and improve the methods and systems for collecting, analyzing, and releasing industry operational data. The central idea is to correctly guide public opinion and sentiment, create a constructive and favorable environment for the high-quality development of automobile companies, and reverse the undesirable tendency of "judging heroes solely by sales volume" and "solely following sales volume."

If automobile companies are ranked solely based on sales volume, it is likely to focus people's attention on this aspect while neglecting more critical ones.

How can a robust mechanism for collecting, analyzing, and releasing automobile data be established?

First, it should be carried out by professional and authoritative departments.

Currently, there are numerous and diverse sources releasing operational data (especially sales volume) related to the automotive industry, making it difficult to distinguish between genuine and fake information. Originally, possessing this information could serve as a reference for the state to assess economic operation trends and make corresponding adjustments. However, if this data is inaccurate, it may produce unintended negative effects. The mixing of genuine and fake information also provides opportunities for illegal activities such as data fraud and manipulation.

Second, appropriately reduce the nodes and frequency of releasing production and sales volume data.

In March of this year, the China Association of Automobile Manufacturers issued an initiative to cancel the weekly sales volume statistics release, which had a very positive actual effect and impact.

Furthermore, the industry could also consider adjusting the release of data at other nodes. Continuously and frequently echoing in people's ears over a short period may leave an indelible mark on judgments (or impressions) over time. As the saying goes, a lie repeated a thousand times may become the truth. We must remain vigilant against the subtle influences of such effects.

Third, in addition to production and sales volumes, more attention should be paid to data on marketing revenue, profitability, capacity utilization, labor productivity, technological progress, innovation performance, overseas operations, product quality, safety and reliability, and production safety conditions.

Ranking automobile companies based on this foundation is more authentic and credible.

In this regard, we can draw inspiration from Fortune magazine's annual "Fortune Global 500" operating performance statistics, which list two types simultaneously: one is based on revenue (sales volume), and the other is based on profitability. This type of ranking better reflects the authenticity and degree (level) of a company's "strength" and "power."

Of course, it is not an easy task for the Chinese automotive industry to research and introduce similar statistical works. It requires long-term, arduous, and meticulous work and accumulation. However, everything must have a beginning. China can make its automobile industry the largest in the world and should also strive to make its automobile data statistics and analysis the most objective and scientific, becoming one of the most outstanding achievements in the world's statistical community. I eagerly anticipate this.