European dealers sell cars to themselves to boost their sales

Article by Andrew Christian, on October 8, 2012

As the European auto market continues to struggle, Ford Motor Co. and other automakers have turned to “self-registrations” to boost their sales. Under this practice, dealers sell cars to themselves without customer orders. Roelant de Waard, vice president of marketing, sales and service at Ford of Europe, said that this move is very common in Europe.

In fact, self-registrations make up 30% of industry registrations in Germany in the first eight months of the year. Dealers would later sell these cars as used vehicles that are heavily discounted. When interviewed at the Paris Motor Show, de Waard said that this practice will probably persist unless demand goes or the capacity is adjusted.

The European Automobile Manufacturers’ Association revealed that Ford had the worst drop in European car sales in six months in August while industrywide registrations fell 8.5% to 722,483 vehicles compared to the previous year. ACEA announced on Sept. 18 that Ford’s sales in Europe declined by 29% to 43,401. Its market share decreased to 6% from 7.7% the previous year.

Chief Executive Officer Alan Mulally has been instrumental in the company’s revival but his efforts are being hampered by the economic situation in Europe. European pretax operating losses increased to $404 million in the second quarter after having recorded $149 million in the first quarter and reporting a profit of $176 million the prior year. On July 25, Ford revealed that it believes that full-year European losses will go over $1 billion, which is double its prediction made earlier.

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