The sagging EU economy led to the worst car sales since 20 years (cause and effect could also be the other way round.) With so much riding on car sales, France’s La Lettre Auto K7 found a way to predict them with greater certainty: They simply ask car dealers how many orders they received. Most volume brands in Europe are built-to-order, and even in the worst economic climate, that takes a minimum of 4 weeks until the car is ready to be registered. That’s when usual statistics recognize the sale.
Reuters has received an advance copy of the new prediction. May data see an overall 3 percent fall in passenger car orders at the surveyed dealers. That’s not too bad, unless when your brand is Opel or Dacia. Says Reuters:
“Opel, the European division of General Motors, experienced a 32 percent decline at surveyed dealerships in May, with orders for its Adam mini falling short of expectations.
Renault’s orders grew 15 percent, helped by the new Captur compact SUV, but its no-frills Dacia brand tumbled 24 percent. Orders for Peugeot cars fell 2 percent while sister brand Citroen dropped 7 percent.”
This shines the spotlight on how car sales are generally counted in Europe. They are counted when cars are registered, and the data are published by the registering government entities, not by automakers. That should make for the most dependable data, would there not be a nasty phenomenon, which TTAC has mentioned a few times in the past. Dealers “buy” the car themselves, register it for one day, then sell it as “used” at a high discount.
According to Jesse Snyder in Automotive News, they sell it “usually to dealers in other countries, who then resold them as new. If a car is shipped from Italy to Austria to Slovakia to the Czech Republic, how many times is it reported as a new-car sale?”
Whether the second “sale” goes in the new or in the used column, at the very least, this practice skews reported car sales. It makes them look better than they actually are – at least for a while. Last year, sales looked benign in Europe, and especially in Germany, for a while. One of the reasons behind it were the one day registrations. Last September in Germany, approximately 30 percent of the “sales” were phantom sales.