Auto sales have been incredibly high in recent years, and because of this auto makers have been facing a lot of pressure to continue to grow their sales. Because of this pressure, some companies are artificially raising sales by counting new cars bought by their dealers as sold. This raises the question: is the auto industry as healthy as it seems?
Kia, BMW, and Nissan have all encouraged their dealers to buy new models and offer them as used models even when they have very minimal milage on them. These companies claim to do this for the sake of the consumer. One automaker claims that by doing this they are able to offer more cars for loan while a consumer’s car is being serviced. Some companies offer subsidies to dealerships that can offer these loaner fleets.
Kia has instructed dealerships to record a small number of unsold cars as sold and to use these as test drive cars for up to 15 days. After that point they will be given discounts up to $6,000. These cars can also be sold as used cars after their test drive period even if they only have a few miles on them.
Nissan encourages dealers to stock rental fleets which are supposed to stay on the lot for 90 days, but this period is often waved by Nissan, so their dealers can sell these cars as used even if they have no miles driven on them and have never been titled to an owner.
These questionable sales tactics are concerning for people around the auto industry.