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Market Insight: Car buyers remain optimistic

Small wonder: The small car segment is the strongest category for intended purchasers in Australia, according to data released by Roy Morgan Research. (Mazda3 pictured)

Latest buyer intention survey results reinforce positive outlook for new-car sales

Market Insight logo29 Jan 2013


THE latest data from Roy Morgan Research on Australian new-car buying intentions reinforces the optimism in the automotive industry that it should maintain its current record-breaking level of new-vehicle sales this year.

Despite uncertain economic conditions – fuelled by a rise in the national unemployment rate last month and expectations that the jobless rate will continue to climb in the first half of this year – Roy Morgan’s ‘single source’ surveys indicate that new-car sales momentum is likely to be maintained.

Results from surveys conducted in December show that an estimated 642,000 Australians intend to purchase a new vehicle over the next 12 months, marking the third consecutive month that car-buying intentions increased after being on a downward trend since May last year.

However, the longer-term outlook is less certain, with the latest figures showing only a marginal improvement towards the end of 2012 in four-year new-car purchasing intentions.

According to Roy Morgan Research communications director Norman Morris, the longer-term averages remain high, but recent declines could reflect uncertain economic conditions, such as the jobless rate and difficulties in key sectors including mining and construction.

“While 2012 proved to be a very strong year in sales, it will be interesting to see if the car industry can maintain its growth into 2013 and beyond,” said Mr Morris.

“Current indicators are that the positive trend will continue over the next 12 months, particularly if the Australian dollar remains strong, attractive finance deals continue and new models are released.

“Four–year new-car (purchasing) intention remains healthy and above the average, yet recent declines suggest economic uncertainty may be dampening Australians’ willingness to commit to a major purchase in the long term.”

Over the longer term, Roy Morgan’s data suggests an estimated 2,225,000 Australians intend to purchase a new car in the next four years. This is more than 140,000 units above the long-term average.

The figures do not include fleet, government and rental car purchases.

Breaking the figures down further and the most recent data shows that the percentage of people intending to purchase a passenger car in the next four years has increased in recent months to 56.4 per cent (1.255 million), while those intending to purchase SUVs – which has climbed steadily over the past 18 months – has dropped away slightly, down to 27.3 per cent (607,000).

Within the passenger-car segments, small cars remain the strongest category for intending purchasers – back to 23.5 per cent (523,000) after a surge at the end of last year – while large cars have shown some resurgence in recent months, possibly due to the forthcoming VF Commodore, with 10.3 per cent of people (230,000) intending to buy a larger car over the next four years.

This places the large-car segment ahead of the medium-car segment (9.5 per cent, or an estimated 212,000 people), which dropped off sharply between June and September last year but has since shown signs of recovery, and light cars (7.2 per cent, or 159,000), which have flat-lined over the same period.

Roy Morgan’s single-source survey results are based on about 1000 interviews covering a range of topics that are held almost every weekend during the year, culminating in more than 50,000 interviews over 12 months.

The Australian motor industry smashed its new-vehicle sales record in 2012, racking up 1,112,032 new registrations, an increase of 10.3 per cent on the previous year.

Of these, 540,359 were privately purchased vehicles (up 12.9 per cent on the previous year), consisting of 322,750 passenger cars (up 5.1 per cent), 162,903 SUVs (up a whopping 31.8 per cent) and 54,706 light-commercial vehicles (up 14.5 per cent).

Favourable exchange rates for importers and aggressive sales and marketing actions across the board were major contributors to last year’s outstanding result, along with a surge of Thai-built vehicles in high demand after supplies were restricted after the devastating floods of 2011.

Factors such as the recovery of Thai vehicle imports are seen by the Federal Chamber of Automotive Industries as having artificially boosted the market last year, prompting the peak industry body to predict a slight fall this year to around 1.075 million.

However, market leader Toyota and other car companies are anticipating that the industry will maintain its 1.1-million sales rate.

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