Chinese Dealers Exaggerated Volvo Sales

Zhejiang Geely Holding Group's Volvo Cars unit confirms that some of its 150 dealers in China recorded sales in 2011 that hadn't occurred in a ploy to receive additional cash incentives.

Those dealers then hid their actions by under-reporting deliveries by an equal amount in 2012, according to the company. Volvo insists the dealers weren't cheating because they followed the rules of its incentive program, which have since been changed.

But the company says the distortions caused it to inaccurately report an 11% sales drop to 42,000 vehicles in China last year, when volume actually increased by an unspecified amount. When Volvo fired CEO Stefan Jacoby last October, it implied that one reason was the brand's poor performance in China.

Reuters, which first reported the discrepancies late last week, says Volvo registrations in the country climbed 15% to 45,900 vehicles in 2012.

The company says it won't correct the totals retroactively. That renders year-over-year sales comparisons in China including the 76% surge Volvo reported in January meaningless until mid-year.