Notice to candidates buying a car: the opportunities to buy a new or almost new vehicle from a dealer with a nice discount have increased significantly in recent weeks, and the phenomenon should regularly repeat itself this year, with a peak expected in the last quarter of 2020. Good deals following occasional registrations, made to artificially stimulate sales, or to dodge tightening of taxation or anti-CO2 standards.
These numbers boost is nothing new. In the lingo of the sector, we speak of “Tactical sales” , which have just added to those carried out with individuals and companies. With two main levers: sales to short-term rental companies (Avis, Hertz, Europcar, etc.) which are done with a very small margin, but also registrations made by the dealers themselves, under the motive of demonstration vehicles (VD) or courtesy vehicles (when is to troubleshoot a client).
Sales boost
“Behind these registrations, there is often a real need,” says Guillaume Paoli, co-founder of AramisAuto, one of the leaders of the second-hand market in France. Dealers need VDs to get customers to try out the new models. They also use it to motorize their sales forces. “
But little by little, professionals have become accustomed to artificially inflating the number of registrations by using DV. This may be a request from the manufacturer, which leads its dealers to each take a few additional DVs to support production volumes and sales figures. But it can also be at the initiative of a distributor. “Their remuneration includes bonuses based on the number of registrations,” explains Guillaume Paoli. With the exception of a few units, the DV can achieve the objective ”.
One new car in 4 in December 2019
Both have become accustomed to embellish the figures with this lever. And in recent years, they have forced the dose. While in 2016, AAA Data had identified 290,000 registrations carried out by the networks, this figure increased last year to 382,118! representing 17% of new car sales in 2019.
The trend has been particularly strong at the end of 2019 , with 114,000 VD and garage registrations in the last quarter, including 47,254 in December alone. Almost one in four cars sold that month.
The impact of the hardening of the penalty
This economic peak has two explanations. The hardening of the ecological penalty scale on January 1, first of all: “There are models that had to be registered absolutely before this date to avoid a hardening of the penalty of several thousand euros”, explains a dealer.
In addition, manufacturers are under pressure from the CO2 targets set by Brussels: since January 1, these must not exceed, under penalty of heavy fines, an average level of CO2 emissions of 95 grams per kilometer on the year 2020.
Models to be massively destocked
To more easily reach the goal, most brands cut their catalog last year by stopping manufacturing models and versions with a poor CO2 balance. They then had to destock the cars already produced, making sure to register them before December 31. Leaves, when they did not find buyers, to register them in VD.
As a result, the sales networks ended up with a significant number of RVs in their car parks in early January. A situation they have no interest in dragging out because these cars in stock weigh on their balance sheet. In addition, “registering a new vehicle means giving it a date of birth,” explains Christophe Maurel, president of the dealerships branch of the National Center for Automobile Professions. It then depreciates over the months. “
Still good deals at the end of the year
To speed up sales, the concessions highlight these “zero kilometer opportunities”, and apply discounts of up to 30% of the list price. Customers are logically there: according to statistics from the specialist in the occasion Autoscout 24, sales of cars with less than a year of service rose in January by 15% over a year, and by 17.5 % in February, two increases each time higher than that of the second-hand market.
And these good deals should appear again in the coming months, especially at the end of the year. To reach their CO2 targets, manufacturers must register by the end of 2020 tens of thousands of electric vehicles . “However, nothing says that customer demand will be there, points a professional. If the mayonnaise does not take, it is very likely that the brands which will have put their battery models late on the market will be led to make occasional registrations with flying colors in December to avoid fines from Brussels ”. This would translate into an influx of new electric cars at reduced prices in dealerships in January 2021.