The UK Society of Motor Manufacturers and Traders today announced a startling 23.8% y/y rise in December UK new car registrations and 10.8% for the entire year. The Prime Minister’s twitter account touted the gain but the acceleration from the 7.0% y/y pace the previous month and raised many eyebrows in the market.
The Telegraph tracked down what was behind the spike:
James Baggott, managing director of Car Dealer magazine, said the numbers are being skewed by a practice known as “pre-registering”. This occurs where car dealers effectively buy vehicles from manufacturers, often at a big discount, to help them hit their monthly targets.
Each vehicle is registered with the DVLA so counts in the SMMT data. They are later sold on to customers, often at a discount, but with one previous owner even though they might have only a few miles on the clock.
Earlier in the year, Baggott said one manufacturer had registered 37,000 cars through Sept 29 but by the end of the next day 51,000 cars had been registered were marked as ‘sold’.
