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Archive for July, 2009

Government claims dubious credit for record sales

The good news is that June vehicle sales reached a record high, with a 36.3 percent increase on May sales, and the third biggest sales month in the history of Australian auto sales.

Industry Minister Kim Carr ( what an appropriate surname) stated that the Australian car market was performing better than those in North America, Europe and Japan, and claimed that this was due to ‘the carefully targeted investment packages’.

That may well be true, and in fact, our own experience at Private Fleet in June reflected the overall sales patterns, but with one proviso.

There was a huge stock shortage problem in the market place. It was a real headache sourcing a car to the precise specifications that a customer wanted.

And why was this?

Simply put, the trade had reduced their forward orders in anticipation of a sales downturn.

The 50 percent small business incentive announced in the May budget took the trade by surprise, and they had no chance to gear up stock levels.

If the Federal Government had simply given advance warning to the trade, allowing them to increase stock levels to meet the expected increase in demand, then we could very likely be reporting an outright record month.

The 30 percent tax incentive for big business has now expired, so what can we now predict?

First off, we can see that the trade will be increasing their forward ordering in the light of the June demand. There will be some sustainable demand from small business as their 50 percent bonus runs through to the end of the year.

But we now think that the build up in stock levels may well exceed the softening demand from the corporate sector ( their 30 percent tax bonus having now expired) over the next few months.

Coupled with the weak overseas markets and the manufacturers’ keenness to get stock moving out of the factory doors we may have some pretty good dealer offers looming.

It may be a matter of getting exactly the car you want at a price you are thrilled with over  the next few months.