Hit by slumping European sales, Ford (F) and other automakers are boosting numbers through...

Hit by slumping European sales, Ford (F) and other automakers are boosting numbers through "self-registrations" in which dealers sell cars to themselves and then offload the vehicles to customers as second-hand cars for big discounts. The practice accounted for 30% of industry sales in Germany from Jan-Aug, says Ford Europe exec Roelant de Waard, who was speaking ahead of the Paris Motor Show, which officially starts tomorrow.

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Comments (4)
  • GaltMachine
    , contributor
    Comments (2090) | Send Message
    Wow. Private enterprise thinking like a government. Sad.
    28 Sep 2012, 07:53 AM Reply Like
  • Tdot
    , contributor
    Comments (9373) | Send Message
    This is pretty disturbing and disappointing. It does seem to explain Ford's $404 million in losses in the first half, and the projected $1B for the year, in Europe.


    Selling brand new vehicles as dealership "demo-fleet" or whatever with the perhaps 20% depreciation for accumulated miles is clearly an act of desparation.


    But this is what you get when you are forced by European governmental and union regulations to keep plants open building and stockpiling vehicles, regardless of whether they can be sold in a fair free market.
    28 Sep 2012, 08:04 AM Reply Like
  • Kaowthum
    , contributor
    Comment (1) | Send Message
    Is vehicle self-registration legal in the U.S.? If so, is the practice common?
    28 Sep 2012, 05:43 PM Reply Like
  • Tdot
    , contributor
    Comments (9373) | Send Message
    "Channel stuffing" is sometimes done in the US to essentially "park" surplus vehicles on dealership lots, particularly during model year changeovers, and to claim them as "sales". It is certainly frowned upon, and sometimes gets the attention of the SEC, but it is hard to prove unless the dealerships complain, with they are generally loath to do. It is certainly crooked, and many automakers have been accused of "padding the numbers", but there are also plenty of loopholes in the dance.


    The main issue is over who gets taxed for the inventory. Inventory that is held by automakers become taxable assets against the automaker's profits, which is why they try to unload them at tax time on dealerships; sometimes with incentives to cover taxes and such.


    Technically, under US automobile franchise law, automakers sell vehicles at wholesale to dealerships, and dealerships then sell them to retail consumers and fleets (rental, governmental, etc.). Automakers report the wholesales to dealerships each month, while actual registrations and other methods record retail and other sales by the dealerships. The numbers do not always match, and when there is a large difference, that becomes evidence of something fishy going on, sometimes leading to accusations of "cheating" in order to claim some sales title.
    28 Sep 2012, 07:08 PM Reply Like
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