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A question of confidence
Survey suggests car buyers are still wary of loosening the purse strings this year
19 Oct 2009
CONSUMER confidence has returned to pre-global financial crisis levels, according to Roy Morgan research, but the question is whether that will translate into a triumphant return for car sales.
Consumers are more likely to buy new cars when confidence is high, but confidence in the economy does not always directly translate into new-car purchases.
Roy Morgan measures this more closely with its Intent to Buy a New Car survey which measures private buyer intention to buy a car within two time frames – next year and the next four years. Fleet, government and rental buyers are not included.
Australia’s intention-to-purchase new vehicles data took a hit in line with the fall in consumer confidence around June last year, finally bottoming out at the end of 2008 and early 2009.
Monthly figures show the intention to buy started to recover this year before an unexpected decline through June and July when the number slid to 488,000. In July, the count bounced back to 565,000 in August to hit a high of 592,000 last month.
The latest rolling quarterly results show more than two million private Australians intend to buy a car in the next four years (2,057,000) and 549,000 Australians intend to buy a car in the next year.
Dig deeper into the September numbers and some interesting facts pop up.
Respondents were particularly keen on buying compact SUVs in the next year, which reflects a general trend of SUVs performing stronger than most other vehicle classes.
The consumers also expressed more intention to buy Hondas and Nissans, two brands which haven’t tracked all that well for the past six months.
Perhaps the most interesting finding is that more women intend to buy a car in the next year than men. This has happened before, in March, but it is still a rare occurrence.
The intent to buy in the next four years number dropped to 2,001,000 in July off a strong run through March to May – a result that surprised everyone – before shooting up to 2,207,000 in the strongest result since July 2008.
In September, the number of people intending to buy a car in the next four years dropped back to 1,964,000. It is this kind of contrast in the monthly results that make it wise to look at the rolling quarterly numbers for a more accurate view of buying intentions.
That shows that both the intention to buy in the next year as well as intention to buy in the next four years are above the long-term averages, but have dropped off slightly in the past few months.
They suggest that despite a wide spread confidence that the economy is bouncing back, many Australians are not quite ready to return to dealerships, a trend being borne out in new-car sales.
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