Car Sales
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.
Yikes – New Car Sales down 22.2%
Official figures out today show that just 71,647 cars, trucks & light buses were delivered last month. That’s down 20,434 vehicles on the same month last year.
As mentioned in a previous post these deliveries probably reflect consumer sentiment in October, allowing an average of around a month between sale commitment and delivery.
The big question is how consumer confidence in November itself will affect December sales.
But again, reiterating the silver lining – these sales scare the hell out of the car companies who have long term production quotas they can’t just turn off overnight. Cars will continue to arrive at the docks which will do nothing to alleviate the oversupply issue. This means aggressive discounting- something we are seeing every day. Combine this with the usual end-of-year deals and target chasing & there are some fantastic deals to be had.
Quoting from Andrew McKellar, FCAI chief executive, “On the up-side, there are going to be some very competitive opportunities for anyone considering buying a car in the near future”.
So good news for car buyers, bad news for car makers and sellers. However the good news for everyone is that we’ve just put together a Christmas E-Card!
Brighter May Sales Figures
We can happily report the first bit of good sales news in many, many months.
The Government’s 30percent and 50 percent tax incentives seem to have worked, if recent sales patterns are a guide.
The new car market is showing clear signs of recovery. Whilst sales were down 15 percent year on year for May this compared favourably with the 20percent drop in the first four months of the year.
The Government is giving big business a 30 percent tax rebate on car purchases, providing orders are placed by 30th June 2009, whilst small business ($2mil p.a. or less) will enjoy a 50 percent tax bonus extending to December 2009 on their vehicle purchases.
So who were the big winners in May?
Four wheel drives did well, but the most impressive figures came from Korean car maker, Hyundai, who recorded a huge 32 percent sales lift, led by the highly popular i30 small car.
This has clearly surprised many manufacturers and importers as dealers are reporting stock shortages throughout Australia.
Particularly affected are Honda dealers who have suffered a 60 percent reduction in their allocation this month.
June sales, therefore, may well depend on stock availability rather that pure demand
Level 2, 9 Help Street