HONG KONG (MarketWatch) -- A sharp rise in Chinese car sales and vehicle ownership hasn't been reflected in nationwide gasoline consumption this year, an anomaly that has some analysts scratching their heads in the search for answers.

The disconnect has sparked a range of possible explanations, and even some suspicious musings: One such theory goes that Beijing and its state-owned enterprises are using stimulus funds to buy up new vehicles to subsidize local car makers, with the vehicles then hidden away or turned back into scrap metal.

Standard Chartered stepped into the debate with a recent research note entitled "Mysterious Gas," focusing on what is driving the nation's growing car ownership, which is on track to grow by nearly 25% this year.

"Car sales in China are booming [in the third quarter], but gasoline sales seem to be stuck in the slow lane," wrote Standard Chartered analysts headed by Stephen Green in Shanghai.

The Standard Chartered analysts rejected the "left to rust" theory, which suggests China's government is the buyer of last resort. More likely, Green said, Chinese consumers are being rational. They are driving less -- even as they buy more cars -- as high fuel prices and slower income growth force households to manage their regular expenses wisely.

"Slower income growth this year ... probably means that people are driving their cars less," said Green.

They may even be staying at home more overall -- bus travel has cooled from about 10% annual growth to around 5%, easing demand on one of the transport sector's biggest gas guzzlers.

Efficiency factor

There's little doubt that China's car sales are booming. About 7.2 million new cars -- including passenger vehicles, minibuses and sport-utility vehicles -- were sold in the January-to-September period, up 42% from a year earlier.

Assuming most vehicles older than 10 years are scrapped, China's car stock this year is set to rise about 24% to 32 million vehicles if sales remain on track in the fourth quarter.

That compares with a 10% rise in gasoline consumption for the first half of the year, according to data from China Oil, Gas and Petrochemicals, an energy-industry publication cited by Standard Chartered.

Green says the gap between rising car ownership and fuel demand can be also explained by improving efficiency.

Indications are that consumers are retiring gas guzzlers in favor of more economical models.

Vehicles with engine sizes of less that 1.6 liters accounted for about 70% of all car sales so far this year, up from 62% from 2008, spurred by tax breaks and other government incentives.

Meanwhile, the impact of freight traffic is less clear. Fewer trucks were on the road at the start of the year as growth in freight traffic touched a nadir, in line with contraction in industrial activity. But freight-traffic-growth rates recovered fairly rapidly as the months wore on, presumably as infrastructure spending kicked in.

Slumping industrial activity, which began in the fourth quarter of 2008, crimped demand in what typically accounts for 40% of the nation's gasoline use. There's no direct relation with sales at the pump, but it points to weaker overall demand, Green said.

Rising prices

Meanwhile, fuel prices didn't fall much despite the drop in oil prices in late 2008. Prices for refined gasoline dipped 7% from peak to trough in the wake of the global financial crisis, but still remained 20% higher than they were two years ago.

"While U.S. consumers are enjoying much cheaper gas, China's are not," Green said.

Local governments likely also cut back fuel consumption after a central-government edict to slash discretionary budgets by 20%.

What's more, Green said, figures on gasoline consumption at the retail level in China are not that accurate. No central agency compiles such statistics using an accurate methodology.

Among their shortcomings, the China Oil, Gas and Petrochemicals figures tend to exclude data from independent gas stations and refiners, focusing instead on figures compiled by the two major state refiners, he said. They also don't take into account inventory changes at refiners, an oversight that can lead to large swings and ultimately errors in tracking real demand.

Another reason to doubt the government-as-mystery-buyer theory, he said, was that sales of imported cars are booming alongside those of domestically built vehicles.

Daimler AG DAI, +0.75% (DAI) said Monday it expects its Chinese sales to grow by 65% this year to 65,000 units. Similarly, BMW AG's BAMXF, +2.84% (BMW) sales were up 37% in the first 10 months, and the auto maker expects a further uptick in the remaining months.

"Local governments would hardly be expected to have issued orders to support BMW or Audi," Green said. "We are not averse to calling official data into question ... however, just being skeptical is not enough. Such claims have to be backed up by at least some evidence."