Lies, damned lies, and statistics

It’s been announced this week that new car registrations increased by 10.8% in 2013. According to the figures released by the Society of Motor Manufacturers and Traders (SMMT), 2,264,737 cars were registered in December, marking 22 consecutive months of growth, which has made the UK Europe’s second largest market for new cars, behind Germany.

The total for the year has shown the highest volume since 2007 and the market is now just 5.8% behind pre-recessionary levels. The latest SMMT figures certainly suggest improved consumer confidence and a more sustainable growth path in the UK new car market, and most mainstream media outlets have accepted the data on face value. Cue celebrations all round.

However, there are a few people out there raining on the new car parade.

Certain commentators have pointed out that the data doesn’t give a true reflection of the UK automotive retail sector. They suggest the numbers are being distorted by pre-registrations, where car retailers register new vehicles to themselves in order to hit their monthly sales targets and achieve increased bonuses.

Retailers openly admit that the market has seen pre-registration activity in 2013, inevitably peaking around the plate-change months of March and September when the pressure is greatest to hit the numbers. Of course nobody knows the true extent of pre-registrations as the data isn’t compiled or made public, but a few are calling on the SMMT to release information on which day of the month most cars are registered. Though not a thorough test, it would stand to reason that if more cars are registered within the final few days of the month, many of these are being pre-registered by retailers.

Okay, so we know the published figures may not be truly accurate, but aside from giving a misleading impression that the UK new car market is at the vanguard of economic recovery (the figures help the Bank of England gauge the economy’s health), where’s the harm?

There’s a debate as to whether pre-registering new stock has already gotten out of hand with retailers in a reciprocal cycle of pre-registering, selling cheap, missing the sale of a ‘new’ car and then having to repeat the process the next month. There would also be an impact further down the chain in the used car market as surplus stock would doubtless hit values if demand doesn’t keep pace, and retailer margins will be similarly affected. Thankfully, there’s no sign of any impact in the used market just yet, though.

Once we’ve taken the figures with a pinch of salt, let’s not forget the real facts here. Motor retailers get their much-needed bonuses, manufacturers shift more metal and consumers benefit from great deals on a ‘nearly new’ cars.

As long as the situation remains in control, everyone is a winner, surely?

About GForces

GForces is Europe’s leading provider of digital solutions to the automotive industry. Working with more of the UK Top 200 dealer groups, more OEMs and more international businesses than any rival, we help our clients navigate and maximise their online presence across mobile and desktop platforms.
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Author: GForces (611 Articles)

GForces is Europe’s leading provider of digital solutions to the automotive industry. Working with more of the UK Top 200 dealer groups, more OEMs and more international businesses than any rival, we help our clients navigate and maximise their online presence across mobile and desktop platforms.