The national peak body, Australian Automotive Dealer Association (AADA) is urging regulators to stamp out the practice of falsely reporting vehicle sales figures.

AADA has declared that the practice of falsely reporting sale figures can be damaging to consumers, investors and dealers as well as distorting key data that the economy heavily relies on.

“The practice of reporting false new car sales figures has been highlighted recently in the United States and it is a practice that has been endemic in Australia for some time,” AADA chief executive James Voortman says.

it was reported that the U.S. Securities and Exchange Commissions (SEC) opened up an investigation in September 2019 which resulted in Fiat and Chrysler agreeing to pay the SEC $40 million over inflated sale figures.

Mr Voortman has said that it is time for the Australian Securities and Investments Commission (ASIC) to follow in the steps on the U.S. regulators and reprimand those manufactures that push inflated sale figures.

“It potentially leaves consumers vulnerable regarding the start time of their warranty; it misleads investors by overstating the health of the Australian automotive industry, and it puts the squeeze on dealers who are currently experiencing some of the most challenging market conditions in decades.

“Requiring a vehicle to be registered before it is sold is an important step, but it is only a first step and the whole industry should be working together to ensure that cars are only reported as sold when a genuine customer takes delivery of the car.

“These practices also undermine the credibility of new car sales numbers reported through the VFACTs product, which is used by investors, economists and the Government in assessing the health of the industry and the broader economy and then making key decisions off the back of that information.

“Today, we see the twenty-first consecutive month in which new car sales have contracted – surely now is the time to bring the focus back to profitability to ensure a sustainable future for the industry.”

False automotive sales data impacts consumers in the following ways:

• Leaving the consumer vulnerable regarding the start time of their warranty;
• Due to a vehicle being the second largest investment a household can make (after purchasing a house), it is therefore a key indicator regarding consumer confidence and Australia’s economic health; and
• It can impact interest rates in the economy which will impact all households.

Source: Auto Talk – AADA urges regulators to stamp out fake sales reporting

9 Jan 2020