The Truth in Sales Reporting, Before You Dare To Compare You Must Read This

Every month we keep you up to date on the latest in sales from biggest automakers. But if you look at the numbers closely you may see the hidden facts behind the PR department’s smoke and mirrors game.

I will come out and say right here, that all reporting of sales on AutoSpies is basically the press release from the manufacturer as posted through a variety of legitimate news outlets. But if you try to take the figures and compare against the competition you will find some of you may have oranges while others have apples. The figures just don’t compare and here is why.

The Germans tend to report sales strictly based off of the raw sales numbers. Basically you are up or down in sales according to the month. So if you sold 9,500 vehicles this month vs. 10,000 vehicles for the same month last year, you have posted a 5.0% decrease in sales or a drop of 500 units. Brutally honest and simple and paints a potentially stark picture for your investors on that month’s sales activities.

Now the Japanese (and the Americans to some extent) tend to look at it a bit differently and step in and may say the Germans are doing it all wrong. They prefer to factor in that this month you only have 24 selling days vs. 26 last year, so you have to base on your average “Daily Selling Rate” to get a true figure. While this seems fair, it does paint a far different picture. Let’s take the example above and compute the figures according to this new philosophy.

If you remember we sold 9,500 cars for the month vs. 10,000 for the same period last year. The only difference is that last year we had 2 more selling days than this year. After computation we now can successfully claim that our 5.0% drop in sales is now almost 3.0% GAIN in sales for the month based on the “Daily Sales Rate”. Yet we still sold 500 less vehicles. So we post a sales gain percentage to the press and the average person on the street sees the percentages and look no further.

Why is this possible? It basically boils down to the fact that there are two acceptable way of reporting sales that yield marked differences in perception. If we run a few of the major players with differing reporting methods for last month we see the following.

Toyota, Honda, VW, and Nissan all posted less sales numerically than last year and posted declines in raw percentages. But if we change those to a DSR method three of the four now show sales gains.

Now if we take Acura’s dismal sales last month we can see by reporting it based on DSR, we get a change from a 21.5% decline with a raw figure to a slightly better 15% decline, still bad but better numerically. Lexus’ raw increase of 5.33% now translates to an adjusted increase of 14.11% much more favorable in the eyes of the beholder.

The purpose of this exercise is to warn you to look close at the figures to see what is really going on, and never take a percentage as a reality. They can be deceiving. Many of the posts by our readers are based purely on the percentages not the raw figures. Both are correct to a degree but it is easy to put you foot in your mouth and think your are doing better than you really are.