New vehicle sales reporting to change

The numbers behind the new car market in Australia are set to become more realistic in 2020 with the arrival of stricter guidelines for the way manufacturers report their sales.

From January 1, a vehicle will require a registration plate if it is deemed to be sold in Australia, thereby eliminating a loophole (at least in part) used by some manufacturers who misreport vehicles as registered months before keys are physically handed over to a buyer.

As revealed by carsales earlier this year, the accuracy of new car statistics in Australia are regularly cast in doubt by claims distributors are misreporting up to 30 per cent of ‘sales’.

The practice, which often involves dealer demonstrator and lease vehicles erroneously being reported as sold, allows Australian distributors to meet lofty targets set by their parent company. However, given new car sales are seen as an important economic indicator, auto industry execs now want misreporting banished altogether.

“It’s not an all-new process. It is part of our program of constantly trying to improve the process. An update as we go,” said Federal Chamber of Automotive Industries (FCAI) spokeswoman, Lenore Fletcher.

“It comes into play next year.”

Manufacturers who report to the FCAI’s VFACTS service were informed of the new reporting standards earlier this year (2019). Since then there have been negotiations regarding when the new guidelines would come into effect.

According to Volkswagen Australia managing director Michael Bartsch, the new mandate will afford dealers some much-needed breathing space.

“The industry as a whole needs to look at the way they’re calibrating their business next year, because the dealers are not making any money,” he said.

“There’s too much stock and too much production availability. The FCAI have been really quite strict with the whole thing. They’ve said that if you don’t have a number plate on the car from January 1, it won’t be included in VFACTS.

“Everybody has had a preparation period leading up to the January 1. There are a couple of brands – I won’t mention who but two in particular – who were very against it. But the industry has to get to a point where there’s no bullshit in the numbers being reported,” Bartsch stated.

The VW boss continued: “So many people rely on those numbers -- government, financial institutions, shareholders and so many others. They say the numbers should reflect reality, so [currently] you have to watch very carefully what is reported as sold, and watch demonstrators, company cars and what is sold to fleets has to be watched.”

The Australian new car market has dipped 8.2 per cent year-on-year in 2019, figures released for the first 11 months of 2019 revealed last week.

Bartsch attributed a small part of that dip to manufacturers adopting the more representative reporting regime in the closing months of the year.

“It’s in everyone’s interests. The FCAI has been really good with it, and everyone has been towing the line as we head towards it, but the real clock ticks over on the first of January that a car must have a number plate screwed onto it,” he said.

“We [Volkswagen Australia] have an error rate of less than two per cent, so less than two per cent of our cars don’t have number plates. Lots of other manufacturers are saying the same. It’s already well and truly there.

“Once a number plate is screwed on them, it means the title has changed. In other words, someone other than the manufacturer owns the car -- it’s in the system and can’t ever be pulled back and plated as a new car. Anything that happens, thereafter, it’s a used car -- it’s registered,” Bartsch explained.

“I’d be surprised if there’s more than five per cent [of cars misreported] in any month next year.

According to the FCAI, the immediate forecast for new car sales in Australia is mixed. Spokesperson Lenore Fletcher cited contrasting factors such as the recent uptick in the Australian housing market mixed with continued tighter lending conditions from the banks, and the early onset of the bushfire season in recent weeks.

“We think that 2020 will be a similar situation to 2019,” she said.

“But one of the things we’ve been saying is there’s never been a better time to buy a new car. We’re at the end of the year, it’s traditionally a time of year where you’re going to start seeing some great seasonal specials as well.

“Given the tough market there are some good deals out there,” Fletcher stated.