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Rate rise no problem: Ford
Ford chief: Tom Gorman says budgets may be adjusted, but people won't stop buying cars following this week's official interest rate hike.
Ford Australia boss is confident interest rate rise will not affect new car sales
17 August 2007
LAST week’s interest rate rise is unlikely to affect booming new car sales.
That is the prediction of Ford Australia president Tom Gorman, who said the increase might cause people to adjust their budgets, but would not stop many from purchasing cars.
“Even with a rate rise, I think the economy is quite durable and capable of absorbing that, although that is not to say that people are going to have to make adjustments,” he said.
“The underlying strength of the economy is just a fact. The latest data suggests it is at a 33-year low, which is a very strong sign.”
Ford is estimating Australian vehicles sales to hit 1.03 million sales this year, which is 70,000 short of Toyota Australia’s estimate and 23,000 short of the prediction made by the Federal Chamber of Automotive Industries.
Mr Gorman said the second half of the year usually softens-off slightly and he expects the upcoming federal election to also lessen demand.
“There is a historical trend with elections, either way it turns out people tend to sit on the sidelines,” he said.
Mr Gorman cautioned that the current turmoil in investment markets triggered by the US credit squeeze could take its toll if the situation deteriorated.
“The nervousness that you are seeing in the credit markets, flowing into the equity markets here I think has to be watched closely, because that does affect the consumer psyche and consumer behaviour, but overall I think with such low levels of unemployment and household wealth data being pretty positive, it still bodes well for our industry.”