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New Car Sales Crash!

Well figures released today confirm what most in the industry had been expecting.  A big fall in new vehicle sales for October.

Precisely 79,105 new vehicles were delivered in October down 11.4% on the year below.  Year to date, sales are down just 0.9% compared with this time in 2007.  Of course we all know why the sudden drop – the global economic downturn is making Australians have second thoughts before making such a purchase.

It’s interesting to ponder whether people are forgoing these purchases because they actually have less cash to spend or is it the fear of what the future holds that is keeping them back.  I suspect it’s the latter more than anything which is a worry in itself as every industry suffers when confidence is stripped back.

I doubt next month’s figures are going to look all that much better either.  Interest rate cuts should help in some ways but it’s important to remember that with new vehicle sales, deliveries are (on average) usually around a month or so from the order.  So October’s figures really represent many commitments that buyers made in September.  So there could be more bad news to report this time next month.

The irony is, however that due to this fear & falling profits manufacturers and dealers are keener than ever to move stock and as such we’ve been seeing some pretty unusual levels of discounting.  In fact, you could say it’s a buyer’s market out there after all.