Research firms expose misleading sales-reporting practice in Germany

Article by Anita Panait, on August 4, 2012

Although the German car market posted a slight growth in sales for the first six months of 2012, actual figures show that the country’s appetite for vehicles is declining. According to official figures, the German car market posted a 0.7 percent increase in the first half of 2012, but figures from auto market research firms Dataforce and BDW Automotive show otherwise – the demand for vehicles in the country dropped 5 percent in the period.

The contrast between official figures and numbers from research firms is attributed to a notorious sales practice that exaggerates official statistics and gives a superficial impression on German car demand.

The practice, known as "self-registration," involves selling new vehicles in Germany, including luxury cars like BMWs, not to customers, but to carmakers and their dealers. It is estimated that three of 10 cars in Germany are sold and registered this way, equivalent to nearly half a million in the first six months of 2012, which is greater than the total demand for new cars in Spain. This means that car manufacturers do not just produce vehicles, but they also make up bogus growth figures.

According to Ferdinand Dudenhoeffer, head of automotive thinktank CAR at the University of Duisburg-Essen.Industry, carmakers are deceiving their shareholders, since they make it seem that the vehicles were actually sold. Industry watchers, meanwhile, disclosed that carmakers are paying dealers cash bonuses equivalent to three to four percent of a vehicle's listing price to achieve targets related to the number of new cars registered as officially sold, regardless whether a real customer actually bought the unit.

GM France President Yves Pasquier-Desvignes gave a warning that the "self-registration" practice could have a "devastating cost" for dealers, who may end up getting caught in a vicious circle.

Topics: germany

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