Monday, September 12, 2016

New Car Registrations Grow!

Since the latest figures for new car registrations are only available for July 2016, I will below always comment on the periods January-July (7 months).

Back in 2009, new car registrations for that period were 146.584 units and the comparative figure for 2016 (7 years later) was 54.447 units. That shows the drama of the Greek economic downturn.

The interesting aspect is that new registrations collapsed in the early years of the crisis (until 2013) and, since 2014, they are increasing again. In 2014, they increased 22,5%; in 2015 7,7% and in 2016 12,1%. In fact, in the month of July, new registrations increased by as much as 29,1%!

What is to be made of that?

When a market, despite increases in recent years, is still down -63% relative to the previous peak, the meaning of these increases becomes quite relative. And yet - increases are increases and they do reflect increased car purchases. Perhaps smaller cars and perhaps cheaper cars but still new car purchases.

The nice thing about new car registrations is that the figures cannot really be 'fudged'. Units are units, regardless whether they are partially paid for 'in black' or at different VAT rates.

Secondly, even though the increases are not all that meaningful in the context of previous declines, they do reflect a change in trend. After all, it could have gotten worse back in 2014 and, instead, it got better. So whatever the trend was before, since 2014 the trend is different.

As the crisis continues into its 7th year, I am beginning to wonder how meaningful Greek economic statistics really still are. The Greek economic agents seem to have adjusted well to chaos and a very important aspect of this adjustment is undoubtedly the transfer of economic activity from the official into the shadow economy.

There is no shadow economy for new car unit registrations. They are and can only be official.

So those who believe that new car registrations are a good indicator of the real economy, they will argue that - notwithstanding official statistics to the contrary - the Greek economy is actually developing quite will because the Greek economic agents have well adjusted to chaos.


  1. Car rental companies like Avis, Budget and similar in Greece always renew their fleets for the tourist season.

    It would be a mistake of interpretation to suggest that suddenly Greek consumers are interested in cars.

  2. You have earlier mentioned infant industry protection, that would require the acceptance from the other EU countries, I;m not opposed to that. But before they do that they should tax the hell out of luxury imports like cars, German cars are still cheaper than in Germany, not to speak of other European countries. It is legal as long as they have the same tax on domestic products of the same category. It would help the state coffers and/or their current accounts.
    No it is not the rental companies new acquisitions, the comparison was year on year.

    1. The link below explains why German cars are significantly more expensive in Austria than in Germany.

  3. The increase in new registrations, is due to the massive influx of used, small, diesel cars, after Samaras goverment dropped by 80% the taxation on them.

  4. Ι also leave this here, because odd things are often simple, to those who know the reality:

    2012 article: Increase 398% to car exports from Greece.

    What has happened is this: The Greeks have been selling their bigger, gas cars and buying used diesel, smaller cars, after the law change that lifted the ban on diesel cars in Greece and reduced the tax. So much for the "miraculous greek car purchases", that you often find in foreign blogs, because people don't know the whole story.

    Mystery solved.

  5. It is not correct to use a macro approach to analyze something specific like changes in car sales. Only a detailed micro analysis, of who bought what sort of cars and why is able to answer any questions. Some respondents here offer explanations, which may or may not be relevant. What is vital to comprehend -- and politicians never do -- is that any taxation or policy changes need to be based on serious research. Making uninformed claims that taxes should be raised on "luxury imports like cars" is typical of politicians, and redolent of all the massive errors that have compounded the global financial crisis and eurozone crisis. This is not an acceptable way to argue, and not an intelligent way to make public policy.

  6. My remark was not about cars or the global financial crisis, it was about the Greek permanent crisis and taxing the hell out of luxury imports.

  7. Did they sell their bigger gas cars abroad?