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Government subsidies skew sales Spanish dealers say
<p><strong>Government subsidies skew sales, Spanish dealers say.</strong></p>

Spanish Automakers’ Sales Goals Get Dealer Pushback

Business- and rental-fleet sales growth &ndash; up 23.5%&nbsp;and 9%, respectively &ndash; was much more robust than sales to private buyers (up 2.4%) in first-half 2017. Dealer groups note market stagnation began to take hold in October, when no government-incentive plans were in place.

MADRID – Spanish auto dealers seem to have discovered the numerous subsidy programs launched by the government in recent years have created a “bubble” that does not correspond to the real demand.

A total of 667,494 vehicles were registered in Spain in first-half 2017, a 7.1% improvement over the same period of 2016. However, dealers are not happy.

That is because business- and rental-fleet sales growth – 183,386 units, up 23.5%, and 175,722 units, up 9%, respectively – was much more robust than sales to private buyers (308,386 units, up 2.4%).

Dealer groups note the market stagnation began to take hold in October, when no government-incentive plans were in place.

Adolfo Randulfe, a spokesman for ANFAC, the Spanish association of automakers, adds that since October some months have shown decreases in registrations through private buyers.

German Lopez, president of ANIACAM, the Spanish association of auto importers, acknowledges “If sales through the private buyers channel do not grow at the same pace as those of the other channels, the stability of the distribution network is at stake, since the financial stability of car dealers depends mainly on the sales made through that channel.”

Raul Morales, a spokesman for FACONAUTO, the Spanish association of official auto dealers, says registrations have been excessive since the beginning of 2017.

“Sales targets that the auto brands have set (for) their dealers are well above the reality of the market,” he says. “In order to meet those targets, dealers have been forced to self-register too many units again in June, which is why 25% of sales have been made on the last two days of the month.”

Vehicle self-registration is a process in which the dealer himself registers a certain number of vehicles needed to meet the sales targets imposed by the automaker. Those vehicles are sold later as used cars.

“Of course, vehicle self-registration by auto dealers is an opportunity for customers, who have access to heavy discounts, but the risk to dealers is worrisome since they are having to sustain a growing stock, which goes against their results,” Morales says.

“In this regard, the pressure on the auto dealers was especially strong last June, because it coincided with the end of the second quarter, being the quarter the period the auto brands use to establish the sales targets for their respective dealers.”

ANAICAM’S Lopez says the fact that 19,133 vehicles were registered on June 30, the last day of the month, is evidence of dealers being forced to self-register. “That means 14.5% of the total registrations in that month,” he says.

 

TAGS: Retail
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