What constitute “real” new car sales registrations? The first instinct would dictate to say these are sales to private buyers. If the answer is not so clearcut, it is critical to keep in mind that only half of European new car sales are actually private sales. Only taking into account private sales would completely (but rightly?) disfigure the European new car market, notably halving its size overnight. A bitter pill to swallow, and something most manufacturers prefer you don’t know. Just as an example, only 35.5% of new cars in Germany are bought by private buyers, and this figure is 53% in France in July, the first time in a while that private sales are back above 1 in 2 there. Specific tax legislation also has an impact on this figure, for example in Hungary where a huge 75% of cars are bought by companies, whereas these are in actual fact private sales that buyers have purchased through their company to avoid paying more tax.
Only taking into account private purchases would make Europe go back to a sales level equivalent to that of 40 years ago, and the most popular models and brands would also be very different, hurting domestic manufacturers at home, another reason to prevent them from advertising this “real” market too much. For example, the Dacia Sandero, 7th overall in France in July, is in fact the best-selling nameplate there with private buyers above the Peugeot 208, while the Renault Clio #2 overall is down to #4 and the Peugeot 308 #3 is down to #8. In Germany, whereas it is extremely difficult for a foreign model that sells outside Volkswagen dealerships (Seat, Skoda) to enter the monthly Top 20, these are frequent when looking at the private sales ranking, once again led by Dacia, along with Hyundai.
Non-private sales include sales to companies, less in touch with the reality of the market but nevertheless corresponding to a certain demand, even if dictated by different needs: those of businesses. Where things get more complicated is when more and more private consumers opt for the leasing option when they want to purchase a new car. This is categorised as a long-term rental and doesn’t fall into the private sales area, which is a contradiction. But until the way sales are reported is amended, this is what we data people have at our disposal to dissect.
Manufacturers have a lot more “leverage” (read capability to manipulate sales figures) when it comes to dealer and demo sales, as well as short-term rental sales. And this is where we start to encroach on a much more “fake” sales territory. Dealer and demo sales are widely used by manufacturers to boost their monthly results, but in a market such as France, they still represent just 13% of the market, limiting its potential leverage.
As for short-term rentals, they are a clear signal that a carmaker is trying to artificially boost their figures. Renault made a big deal a few years back to reduce their short-term rental sales. Why? Because by putting loads of cars on the used market that were not wanted by private consumers in the first place, it brings about devastating depreciation for the corresponding models. A poster child for this practice, Fiat holds 18% of the short-term rental sale market in France, whereas its market share with private buyers is just 1.3%! The same goes for Opel, a favourite of fleet buyers at home in Germany but disdained by private consumers and therefore struggling significantly with their brand image.
What, then, is a “fake” registration? We can argue a car that is sold in one country but never sees its roads is one. The re-export phenomenon is particularly rife in Eastern Europe. For Bulgaria, where a rumoured 30% of new car sales are re-exported, we at BSCB always publish sales figures with a grain of salt. Latvia and Lithuania are other examples where re-exports completely bias the market. Since the start of 2015, for Czech Republic we now report official sales along ‘real’ ones, removing the vehicles that are de-registered within 90 days – in the case of this country this means they are re-exported and most likely ever see Czech roads in their lifetime. See also: Czech Republic January 2015: New figures unveil re-export culprits. Ford, with 61% of its sales re-exported at January 2015, Seat (53%) and Volkswagen (26%) are the most aggressive at “faking” their sales in the Czech Republic, with some models such as the Ford Fiesta, Seat Ibiza, Audi Q3, Audi A1 and Fiat 500L 100% re-exported (July figures).
The last category of sales, which are not truly fake because legal, is when manufacturers register to meet sales targets and cash bonuses, then de-register these same vehicles within a very short period of time (on average less than 30 days) and sell them as used either in the same country or abroad. This practice is extremely common in Belgium, and the champion at this little sport is Renault, owned at 20% by the French state. According to Febiac and the news site lecho.be, out of 28.240 passenger car sales Renault sold over the first semester of 2015 in Belgium, no less than 8.226 were de-registered within 30 days – that’s 29% of its sales without an actual buyer. From #1 with 9.8% share, Renault drops to #4 with 7.5% in Belgium when these de-registrations are taken into account. We are now getting dangerously close to misleading practices that mask true results to please the stock market or, for that matter, sites like BSCB.
The most recent example was Renault’s score at home in France in June, shooting up to 23.7% share only to tumble down to 14.7% in July, showing clear signs of “sales anticipation” (the politically correct way of putting it) that boosted its first semester results at home. In fact, on a monthly scale, Renault always back-loads its sales month after month, something visible in the intermediate weekly rankings we publish (see France 1-7 July 2015). While it became an automatic way of reading weekly sales at BSCB, this practice doesn’t match the reality of buyers purchasing cars at any given time in the month.
It is very difficult for a manufacturer to disengage from the de-registration practice as it will show frankly disappointing result the entire time it readjust to a normal reporting of salses. It is however possible: in Belgium, Fiat has decided in 2015 to give up de-registrations, going from 26% of its total sales to just 7%. Its 2015 results are showing the impact: the company is down significantly on 2014, but come 2016 its sales will return to normal.
See the Belgian article on Lecho.be: “La technique de fausses immatriculations are encore de beaux jours devant elle“. Many thanks to BSCB reader Guy for pointing this article out.