Europe’s new car sales were up in January. Were they really?

Going nowhere

EU passenger car registrations were up 6.7 percent in January, says the manufacturer association ACEA (full table here). You will hear everywhere today that with the EU market up for the seventeenth consecutive month, happy days are here again in the Old Country. Here are a few things you may need to keep the alleged resurgence in perspective.

TL;NR version: Registrations were up from a ghastly low level, and a good deal was made up. Sales? Who knows.

Gory details: In January 2009, when the market had crashed 27 percent, 957,223 units were registered in the EU plus EFTA (Iceland, Norway, Switzerland). In January 2015, it was 1,028,760 units, not quite 7.5 percent more than in what we thought were the darkest days of the carpocalypse. Surprise for those who thought it couldn’t get worse : In January 2013, registrations had deteriorated further to 916,875. In January 2014, the month on which the new “growth” rates are based, 968,451 units were moved in the EU + EFTA, only a smidgen more than when the sky had fallen in 2009. The “sales gain for a 17th straight month” feted in the press, is nothing more than a consolidation on a very low level.

What’s more, a great deal of the percentage growth goes on account of Mediterranean markets that are limping back from near death during the financial crisis a year ago. Spain up 27.5 percent. Portugal up 28 percent. Italy up 10.9 percent. Only Greece, busy re-starting the Euro crisis, was down 8.4 percent to a mere 5,848 units registered in the troubled country. Germany, Europe’s largest car market and Europe’s strongest economy, on the other hand grew only a tepid 2.6 percent compared to a very low January 2014. And, as we will see below, the number was Made-up in Germany.

Among the volume makers, Renault, up 10 percent in the EU in January, is the clear winner, while cross-town rival PSA, down 1.4 percent, continues its slide into irrelevance. European behemoth Volkswagen Group was up 6.8 percent, largely in tune with the overall market. Among the Americans, Ford was up 5.1 percent. “GM’s Europe Sales Surge in January,” writes 247WallSt. No, they did not, don’t drink and write. Suffering from the death of Chevrolet, registrations of GM Europe, now called “Opel Group,” were down 2.8 percent. Opel itself was up 15.9 percent, but could not make up for the 98.1 percent drop of Chevrolet. In the “Other GM” category, largely a proxy for imported Cadillacs, exactly zero were registered in all of the EU. A year ago, it was 14. (By way of comparison, in Japan, a closed market if Detroit propagandists tell the truth, Cadillac was able to sell 58 in January.) Among the Japanese in Europe, Nissan, up 36.3 percent, has the strongest growth, and is nipping at the heels of Toyota, up 9.6 percent to 48,909 units.

Lastly, here is an item that cannot be repeated often enough: Don’t trust what you read. These numbers are registrations, and in an ideal world, they should reflect actual cars sales much better than the “deliveries to wholesale” that are reported in other markets. The world is not ideal, and the numbers you read are heavily skewed by manufacturers and dealers registering their own cars, thereby creating dummy “sales.” The cars are then sold, later, as “nearly new” at high discounts, or are shipped to other countries. Car dealers and manufacturers are “their own best customers,” as Germany’s favorite car-commentator Ferdinand Dudenhoeffer said. In Germany alone, a whopping 34.2 percent of all registrations reported in January were phantom sales, writes Germany’s kfz-Betrieb. Dealers registered 48,216 of their own cars, manufacturers registered 24,075. Net-net, actual January new car sales in Germany were down slightly. Retail sales crashed 9.1 in January. In all of 2014, retail sales were down 1.9 percent compared to an already gruesome 2013. And that, this also bears repeating, was in Europe’s largest and richest market. And there you have it, Europe, up for the seventeenth month in a row. A full table is here.