The Australian Automotive Dealer Association has urged regulators to bring to an end rubbery new-car sales figures.
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Australian car sales statistics are being overhauled after rubbery figures inflated true customer demand for the past decade.

Contrary to widespread belief, new-car sales data has historically not been based on actual registrations – instead the Australian Bureau of Statistics, CommSec and others have relied on “self-reported” figures supplied by car companies and dealers.

While cars cannot be counted twice, under the old system a new vehicle might not be delivered to a paying customer for several months and, in some extreme cases, until the following year.

The car industry lobby group, the Federal Chamber of Automotive Industries, which collates sales figures, says it is overhauling its reporting practices for 2020 and will be able to compare the supplied numbers with registration data in real time.

“We’ve always said you can only sell a car once,” said Tony Weber, the chief executive of the Federal Chamber of Automotive Industries (FCAI). “What we are doing is adding another dimension … that will compare data supplied by car companies with national registration data bases.”

“If that data base doesn’t show the car was registered in the month it was reported as sold, then it doesn’t get counted within that month. We now have the technology to compare figures against live registration data in a timely and efficient manner,” said Mr Weber.

Under the new rules, there is still scope for a car to be registered and declared as sold but it may not be in the hands of a paying customer. It could still be sitting on the lot for months, with the warranty ticking.

“There will still be some cars in that category, such as demonstrators, but they have to be registered to go into the sales reports,” said Mr Weber. The exceptions to this rule were mining and airport vehicles that do not need to be registered.

The rogue practice of reporting false new-car sales figures has been highlighted recently in the United States – where several car companies were fined millions of dollars – says James Voortman, the CEO of the Australian Automotive Dealer Association (AADA).

“It is high time (the Australian Securities and Investment Commission) follows the lead of regulators in the United States, and comes down hard on those car manufacturers which push fake sales numbers and in doing so artificially inflate their reported market share,” said Mr Voortman.

“It’s an open secret in the industry that a number of major manufacturers set incredibly aggressive sales targets placing immense pressure on their dealers to achieve these targets by reporting cars as sold, despite there being no … customer,” he said.

“Dealers are compelled to comply with manufacturer directives as they fear being denied important incentive payments or even worse losing their franchise agreement. Many dealers have been left with a backlog of unsold stock which is difficult to clear in a profitable manner,” said Mr Voortman.

The new reporting rules will give the Australian Bureau of Statistics and market analysts CommSec a better idea of true customer demand, however it still will not reflect every new car bought by a paying customer, as thousands of registered “demonstrator” vehicles sit on dealer lots.

The new rules also mean some customers will miss out on the start of their warranty period, even though the car hasn’t turned a wheel.

“Requiring a vehicle to be registered before it is sold is an important step, but it is only a first step and the whole industry should be working together to ensure that cars are only reported as sold when a genuine customer takes delivery of the car,” said Mr Voortman.