Make monthly sales reporting mandatory for automakers taking federal money

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Automakers should report monthly sales figures while the industry navigates the coronavirus pandemic — and especially as they seek government assistance.

Many car companies have recently swapped out monthly sales reports for quarterly data, arguing that quarterly reports, rather than monthly sakes, more accurately paint a picture of how well (or poorly) a company and the industry are doing.

That makes sense in normal times, but not today. The COVID-19 pandemic has upended the auto industry, sending sales plummeting as people stay home and demand dries up. We caught a glimpse at how dire things are a few weeks ago, when automakers reported grim quarterly sales, despite the industry operating mostly as normal until early-to-mid March.

Nothing has been the same since, with companies shutting down their factories and showrooms across Canada closing, either by order from the government or voluntarily. Dealers nationwide, who have already been forced to lay off much of their staffs, signaled they would take part in the federal government’s wage subsidy program, which will hopefully help those dealerships (and the industry at large) avoid even more layoffs.

That support is likely to just be the start. Tim Reuss, the head of the Canadian Automobile Dealers Association, told me last week that the CADA is pushing for the government to institute a variety of measures designed to boost vehicle sales once the worst of the public health crisis passes and stay-at-home orders are scaled back. Those proposals include a scrappage program and a sales-tax holiday on vehicle purchases.

Automakers and suppliers are also likely to seek some forms of assistance in the coming months as the industry attempts to get back on its feet. And many ideas should be worthy of consideration, especially since this crisis was not of the auto industry’s making, unlike the 2008-2009 Great Recession. Hundreds of thousands of jobs nationwide are directly or indirectly tied to the auto industry, so plenty of ideas will deserve at least some attention and debate.

But the industry should be as transparent as possible with taxpayers as it taps into multibillion-dollar aid programs, MP Brian Masse, the New Democratic Party’s industry critic, said in an interview Monday. The more transparency the industry has, “the stronger the public support” might be for the industry to draw from public resources, he said.

“I would encourage the highest degree of accountability, transparency and openness, especially considering the fact that we don’t know where this is going to go at the end of the day,” Masse said.

One of the simplest ways to do that would be to reinstate monthly sales reports, at least temporarily. Sales figures are going to be ugly for a while, with April perhaps being the worst month ever. But estimates from respected analysts and organizations aside, we won’t know that for a fact unless we get those sales figures.

Likewise, we may not get useful, positive context if only quarterly sales are reported by an automaker. For instance, let’s imagine a positive scenario where new coronavirus cases and deaths are steadily falling and testing rates are steadily rising in May. Provinces, then, would likely be looking at ways to re-open parts of their economies, even if they do so slowly and cautiously to prevent a second outbreak.

What would that mean for a company’s sales? It would stand to reason in such a scenario that sales would slowly pick back up in late May and in June as some restrictions are lifted and as consumers adjust to the “new normal” of a post-pandemic world.

Monthly sales would give us a clearer, more detailed picture of how sales were performing as shutdown restrictions were gradually lifted over time. Relying on quarterly statistics and analysts’ estimates leaves us with only broad strokes instead of the hard data needed to back up statements issued by automakers and retailers.

If car companies and dealers intend to seek additional measures from the government, they must offer taxpayers a crystal, clear picture of the crisis.

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