Hyundai defends pre-reporting

HYUNDAI Motor Company Australia’s (HMCA) chief has defended the practice of artificially enhancing sales figures at the end of critical periods and says the the process of pre-reporting vehicle registrations is merely a “complication” that does not harm the customer.

Despite the South Korean car-maker’s attitude towards pre-reporting sales, Hyundai supports a revision of the current new-vehicle registry system and VFACTS reporting by the Federal Chamber of Automotive Industries (FCAI), in favour of a new structure that more accurately collates national figures each month.

Speaking at a media event in New South Wales last week, HMCA chief operating officer Scott Grant said some media outlets placed too much importance on pre-reporting of cars and that the practice only concerned the organisation.

“Pre-reported cars – does it really matter? No, I don’t think it matters one iota because each car can only ever be sold once,” he said.

Mr Grant explained the system that allows dealers to earn sizeable bonuses each month by topping up the figures with vehicles registered to the dealership and added that the process only creates an internal issue that does not impact customers.

“It is as simple as a dealer has a target of 100 cars, they might have sold 97 and they are three away. At 100 they are incentivised and they pick up whatever they get (bonus).

“As a dealer … – I report 97 and I miss out on $20,000 or I report 100 and I pick up my $20,000. I’m going to sell those three cars next week and it starts again. What’s the big deal?“Pre-reported cars is just a numbers game and it’s not that big a deal. The customer doesn’t lose out. It’s a complication we could do without as an industry but it’s an incentive game.”

In other global markets, governments have implemented more accurate and efficient systems of monitoring exact movements of new cars and sales/registration data, and Mr Grant said it is important to adopt a similar process in Australia.

“I think it’s inevitable that in time the government departments in each state that collect the registration data will need to come together on a national basis and that will form the accurate register of how many motor cars we’ve sold,” he said.

“At the moment the industry is open to our declaration of what we sold and you put it all together and that’s the size of the industry. We know there have been some interesting and public cases around pre-reported cars and other issues from different brands.”

Despite attention from media, the operations of dealers frequently in the spotlight and grumblings from some, Mr Grant said Hyundai’s network of franchisees was healthy but the various teams were working hard for their success.

“Dealers make plenty of money and they are constantly incentivised to do so.

The dealer will always tell you they would prefer to sell less cars at twice the gross profit.

“They’re looking for the one wood duck who is going to walk in and pay $100,000 for an i30 but it doesn’t work and they’ll always complain about it.”

Hyundai is the third best selling car-maker in Australia so far this year, with 61,953 units shifted to the end of July, a 5.7 per cent lift over the same period in 2015 but off the pace of second-placed Mazda (69,433).

The i30 is Australia’s top-selling model to the end of July, with 25,073 sold, representing a 35.2 per cent lift thanks to strong monthly sales in the final year of its model life, particularly in June when Hyundai sold 6432 on the back of an aggressive $19,990 driveaway deal for the i30 Active auto.