Zeekr has the dubious honor of being the first car brand named by Chinese state media to be caught inflating sales in recent years just to hit targets.
The premium EV brand, owned by Geely, has arranged for cars to be insured before they were sold to buyers. This enables them, under Chinese industry registration practices, to book sales early so they could hit monthly and quarterly sales targets. Subsequently, they would sell these vehicles in other cities but with a bigger discount.
In a front-page story, the China Securities Journal newspaper, one of China’s most important government-owned financial publications, interviewed Zeekr car buyers in cities such as Guangzhou and Chongqing, who the newspaper said had found that their cars already had insurance policies before they were sold. These customers said they were refused refunds, even though they felt they were deceived.
The newspaper questioned Zeekr’s unusually high sales in the cities of Shenzhen and Xiamen in December. Its reported sales based off insurance registration records in Xiamen that surged to 2,737 that month, more than 14 times its monthly average.
China Automobile Dealers Association (CADA) data showed that 2,508 of the 2,737 sales Zeekr booked in Xiamen in December were sold to companies, while 257 went to individual buyers.
But data published by Xiamen’s vehicle administration bureau showed just 271 cars registered in December for license plates, which genuine buyers generally obtain once they receive their cars.
As a result, shares of Geely Auto, which is taking Zeekr private, fell as much as 4 percent in Hong Kong last July 21.
Zeekr says they have set up a special team to investigate the “sales issues” raised these media reports but has firmly rejected the report put forward by the China Securities Journal.
Separately, news agency Reuters did their own independent investigation and found the same scheme by in the southern city of Xiamen.
Neta, which is now undergoing bankruptcy proceedings, has done the same. Neta booked early sales of at least 64,719 cars through this method from January 2023 to March 2024. That was more than half the sales of 117,000 vehicles it reported over the 15 months.
Analysts and investors tracking China’s auto industry gauge performance and estimate inventory levels with two sets of sales data. Wholesale numbers reported by automakers to the industry association show sales from automakers to dealers, while retail data compiled from registration records of mandatory traffic insurance show the sales to users.
Vehicles booked as sold before reaching the end buyer are called “zero-mileage used cars” in the Chinese auto industry. The practice has emerged out of cutthroat competition for sales in the world’s largest auto market, which is reeling from a brutal, yearslong price war caused by chronic overcapacity. Some of these vehicles even being exported to markets outside of China.
The industry faces a moment of reckoning, with state media calling out the zero-mileage car practice, China’s cabinet pledging to regulate “irrational” competition, and other central government bodies organizing meetings with the industry’s largest players to express concern about such methods.
To combat these practices, the Chinese industry ministry thought of clamping down on the practice by banning cars from being resold within six months of being registered as a sale.
Somehow Geely finds a way to be involved in bad news. Congratulations Geely excited what new scam is coming up next year and the years to come
ReplyDeleteNot defending bad practices here but it comes with the territory of being a huge corporation with numerous locally run subsidiaries. You should hear about the absolutely vile practices of Nestle in Africa.
DeleteThey get a discounted car AND it comes with insurance? I WISH that happened here. Haha
ReplyDeleteI don't think it's about the car. They're more on referring to the fake sales data from Zeekr.
DeleteIts about the car and the owners. What is weird is that the owners felt deceived instead of overjoyed. Discounted car with insurance is a steal whatever angle you look at it. People should be flocking to buy one once it became public.
DeleteThe Chinese are really good in cheating and copying too.....
ReplyDeleteSales Data lang ito
DeleteDi Naman ito Toyota Daihatsu Scandal na grabe talaga
Mass worst yung Toyota may impact sa customer, yung zeekr went lang yan. No real harm done to customers.
DeleteFYI
ReplyDeleteTesla did this first in Canada
So Chinese copying Tesla
DeleteMas worse pa ata ginawa nung Tesla kasi pa phase out na yung subsidy program tapos bigla lng $40+ million ang ni claim nila na subsidies bago masara.
DeletePalagi damay Toyota kahit na Chinese gov sumita.
ReplyDeleteWhat are you talking about?
DeleteAng hope na lang is huwag bumagsak any of these companies, especially those who are in the Philippines. Otherwise, left holding the bag ang mga bumili.
ReplyDeleteI mentioned this in the article "only 10% of chinese car manufacturers will survive" and I think it bears repeating here; the most popular and highest selling brands that people are buying are VERY LIKELY to be among those that survive the price war happening right now in China so chances are good in that respect.
DeleteSo it's a gamble to buy Chinese cars.
DeleteI think gambling is a bad comparison. You have much more you can learn about potential cars you can buy than the many gambling games you can waste your money on (that are designed to make you waste money). Then you also have layers of protection in terms of regulators (foreign and local), safety standards, insurance, community awareness (stuff like buyers' groups on places like fb), etc.
Delete