Car News

Australian car sales smashed by falling economy

Car sales in April 2020 fell off a cliff, as lockdowns and job losses took their hold on the Australian economy.

THE LATEST Vfacts results clearly demonstrate that Australia is enduring one of the hardest economic moments of its history, with car sales for April 2020 the lowest ever recorded year-on-year.

Following lockdowns, job losses and forced leave for thousands, Australians are no longer interested in purchasing new cars. Comparing April this year to the same month last year, car sales have fallen through the floor by 48.5 per cent (75,550 units in 2019 compared to 38,926 in 2020), and a whopping 52.3 fewer cars were sold in April compared to the month before it.

“Clearly, the COVID-19 pandemic has had a major influence on the April sales result, and reflects a downturn in the broader economy right across the country,” said chief executive of the Federal Chamber of Automotive Industries, Tony Weber.

“Figures recently released by the Australian Bureau of Statistics show that 31 per cent of Australian citizens have experienced a decrease in income due to the pandemic,” he said.

“In addition 72 per cent of Australian businesses reported that reduced cash flow is expected to have an adverse impact on business over the next two months.

“These conditions inevitably impact consumer confidence and purchase decisions.”

Every manufacturer has taken a hit except for two stand out – albeit small – retailers: MG (up 1.5 per cent) and RAM (up 14.1 per cent).

One of the hardest hit brands is Skoda, down almost 81 per cent, while its parent company VW was also down a monumental 62 per cent. Remaining the best-selling brand in Australia is Toyota, though taking a 31.8 per cent hit. Mazda, sitting in the number two spot, is down a whopping 60.6 per cent, and third-place Kia which bucked the trend last month is down 44.9 per cent.

The dominoes keep falling with Ford (4th, down 53.1 per cent), Hyundai (5th, down 65.3 per cent), Mitsubishi (6th, down 63.2 per cent), BMW (7th, down 5.7 per cent), Holden (8th, down 56.9 per cent), Nissan (9th, down 51.5 per cent), and 10th-placed Volkswagen.

All segments were down – SUVs dropped 45.7 per cent, passenger cars down 61.6 per cent, and light commercials down 39.5 per cent.

The carnage continues, but Australia’s market – as poor-performing as it appears – is actually better off than many other countries around the world. India reported that it sold zero cars last month, while Italy managed to sell just two per cent of the cars it normally does.

The net result for the first four months of 2020 is that 272,287 cars have been recorded as sold by Vfacts, down 21 per cent over last year. It looks unlikely that we’ll hit 1 million cars sold for this year unless there’s a remarkable recovery as Aussies come out of lockdown and jobs open up again.

“Our member brands are working closely with their dealer networks to ensure dealerships are accessible and safe,” said Weber.

“But more needs to be done,” he added.

“We are calling on Federal and State Governments to consider the automotive industry, which employs over 65,000 people in Australia, when compiling their recovery plans.

“The JobKeeper and JobSeeker payment programs put in place by the Federal Government are a welcome initiative.

“However, we believe the scope needs to ensure high turnover and low margin businesses, such as new car dealerships, are covered.

“These businesses are often the backbone of local communities and in the current environment, many are facing overwhelming challenges.

“As well as continued business initiatives, support to bolster consumer confidence is imperative to the strength of our economy.

“We have begun to see a slight lift in consumer confidence as the COVID-19 restrictions start to ease.  We really need further measures to support this confidence and continue the positive trend.

“Initially, we would ask that the instant asset write off package is extended to further stimulate business purchasing.”

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1 Comment

  1. Robert
    May 9, 2020 at 1:59 pm — Reply

    Why the irrelevant photo?

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Alex Rae

Alex Rae