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News - VFACTS - Sales 2018

VFACTS: NSW, Victoria lead market down

December chill: Holden sales dropped more than 60 per cent last month, mainly because it engaged in desperate sales tactics in December 2017 to boost numbers.

Biggest states record worrying drop in vehicles sales as industry gets staggers

VFACTS logo4 Jan 2019

THE same Australian states that recorded the biggest declines in housing prices in recent months – New South Wales and Victoria – also put the biggest hole in car sales in December, official VFACTS figures show.
 
While overall new-vehicle sales across Australia declined 14.9 per cent in December, the downturns in NSW and Victoria were 19.7 and 17.9 per cent respectively.
 
Combined, these two powerhouse states recorded more than 12,000 fewer vehicle sales in December compared with the same month last year.
 
Nationally, motor companies sold 87,528 vehicles last month, down from 102,820 in December 2017.
 
This monthly decline was the biggest of any month in 2018 and a major contributor to the 3.0 per cent overall sales drop for the year.
 
All Australian states and territories except Tasmania (+3.3%) recorded a fall in vehicle sales in the last month of 2018, with Queensland sales dropping 9.2 per cent, Western Australia down 7.6 per cent, South Australia down 1.6 per cent, the ACT down 10.0 per cent and Northern Territory down 11.7 per cent.
 
Federal Chamber of Automotive Industries chief executive Tony Weber said the December sales drop did not mean 2019 would necessarily be a tough year for the motor industry, commenting: “I don’t concern myself too much about December.”
 
Mr Weber described the new-vehicles sales environment as challenging, but said underlying economic factors pointed to a buoyant market this year.
 
“Employment is high, interest rates are low and we have had 27 years of economic growth,” he said. “When we look at the value proposition of cars ... the Comsec affordability index shows cars have never been more affordable than today.”
 
Mr Weber said the 3.0 per cent decline in sales over 2017 needed to be put in perspective, as the industry was coming off several high-selling years, including record sales in 2017.
 
He said factors that had impacted the market were a tightening of bank credit in the wake of the banking royal commission, the drought and the impending federal election.
 
December is traditionally one of the busiest months for vehicle sales, with car companies frequently scrambling to meet sales quotas laid down by head office or to outsell major rivals.
 
The December 2017 figure was inflated by such activities, including a campaign by Holden in which it asked its dealers to register masses of cars as “demonstrators” before the year’s end.
 
Raw Holden sales data for December shows a whopping 60.4 per cent dip in Holden sales compared with December 2017, from 12,179 to 4822.
 
In that context, December 2018 might not be so bad, although there was still plenty of retail activity in the form of discounting across the board in the last months of 2017.
 
Mr Weber said competition in the market was intense in Australia, to the benefit of consumers.

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