Earlier this month, the Chinese media proclaimed that 10 million new cars had been sold in China between January and September.
The sector is so frothy that companies which were making electric batteries or refrigerators only need a few years to become major car brands (cough cough BYD, Geely).
And the China market is a lone beacon of hope for the likes of Ford and GM, whose China units are recording sales growth of more than 100pc a year.
But there’s something strange going on. While car sales surged 80pc in September alone, the oil companies reported a different story. Sinopec said its retail sales of refined oil products fell by 5.3pc between January and September.
Although there was a 17.56pc rise in the quantity of gasoline emerging from refineries, there was a 10.25pc fall in the average throughput at service stations.
According to the state media, more than 80pc of cars sold are first cars. Very few cars are replacements or second cars for rich families.
So there’s a strange discrepancy between the increase in the number of cars on the road and the falling sales of gasoline.
Some reasons for this could be:
1. An increasing use of ethanol and biodiesel, especially in the countryside, where a lot of the vehicle sales are coming from. Farmers, or residents in third and fourth tier cities are unlikely to buy cars using expensive gasoline when there’s a cheaper fuel around.
2. There could be a lag in the distribution network. Service stations often run out of gasoline and companies could be having problems supplying the market.
Meanwhile, the number of new Sinopec service stations only increased by 1pc, so the company is hardly expanding its distribution arm. It still remains strange, however, that the average throughput is falling.
3. The new cars could be getting more efficient and using less gasoline.
There is one lingering suspicion hovering over those figures, however. Government departments could be buying up fleets of cars to support their "local champions" and simply warehousing them, never to be driven.