Putting the brakes on car sales
The new car market is in a decline.
The automotive industry has experienced one of its worst end of financial year (EOFY) trading periods on record.
Historically a heightened trading time for dealers, EOFY deals during June and July often mean 30% increase in new car sales.
Figures from the Federal Chamber of Automotive Industries (FCAI) June 2019 Sales Report found there was a 9.6% drop in the Australian new vehicle market.
The sales for June 2019 totalled 117,817 new vehicles, with the year-to-date (June 2019) sales reaching 554,466 cars.
FCAI Chief Executive Tony Weber said the downturn in new vehicle sales highlighted the tough market conditions and sensitive nature of the new vehicle market.
“Over the past six months we have seen various conditions and circumstances which have adversely affected the market,” Mr Weber said.
“These include a tightening of financial lending, environmental factors such as drought and flood, and a strongly contested federal election.
“In addition, the continuing incursion of Luxury Car Tax on a federal level, and now in some cases on a state level as well, is a major disincentive.
“It could just be the straw that breaks the camel’s back for the new car buyer.”
In comparison to June 2018, passenger vehicle sales were down 18.5%, SUV sales down 4.7% and light commercial vehicle sales down 7%.
The downturn in sales isn’t expected to end with research from Roy Morgan finding the number of people looking to buy a new car is 6% lower than 2018 and at the lowest level since 2014.
The research also found 2.125 million people were looking to buy a car in the next four years, down on the long-term average of 2.16 million.
In the short term, 553,000 people are looking to buy a new vehicle, down on the average of 612,000.
Roy Morgan Communications Director Norman Morris said the new vehicle market was likely to face major market disruption.
“Over recent years there has been considerable growth in the new vehicle market, but this is now showing a potential decline and is facing a number of real challenges,” Mr Morris said.
“There is growing concern about the slowing economy, lack of wage growth, energy price escalation and declining home values.
“In addition to these potential economic constraints on new vehicle demand, the rapidly changing technologies with the resultant fuel choice decisions adds to the complexity of decision making in this market.”
Top 10 car models sold in June 2019
- Toyota Hi-Lux
- Ford Ranger
- Hyundai i30
- Toyota Corolla
- Mazda CX-5
- Kia Cerato
- Mitsubishi Triton
- Mazda 3
- Toyota RAV4
- Toyota Landcruiser
Top 10 states purchasing cars in June 2019
- Australian Capital Territory
- New South Wales
- Northern Territory
- South Australia
- Western Australia