FCAI questions lending regulations as car sales fall
August returned another poor month of sales for the Australian automotive sector, and the FCAI is asking if new car lending standards are discouraging buyers.
Australians are either not interested in buying new cars anymore or can’t get the money to, according to data released today from the Federal Chamber of Automotive Industries (FCAI).
August 2019 marked the seventeenth month in a row of falling new car sales. Compared to the same month last year, around 9000 fewer Australians bought a new car, down 10.1 percent on August 2018. In total, 85,633 units were sold throughout August 2019.
Not even the ever-popular SUV can escape a lack of consumer confidence, with that segment down 5.4 percent (39,040 sales), followed by light commercials down 8.6 percent (17,513 sales), and passenger vehicles down 16.7 percent (25,783 sales).
And there doesn’t appear to be any light at the end of the tunnel, according to chief executive of the FCAI Tony Weber, noting that a number of factors are contributing to poor sales across the board.
“There’s no doubt it is a very tough market at the moment,” he said. “And despite the best efforts of the industry, the decrease in sales continues.”
“It is well known that Australia is one of the most competitive markets in the world, and with the current economic environment, it is also one of the most difficult markets in the world.”
“This environment stems from a slow start to the year, with tight financial lending, State and Federal elections and a general lack of consumer confidence, both here in Australia and on an international basis.”
Interestingly, Weber asks if lending in the automotive sector needs to be investigated and revised, suggesting the recent financial reforms are hurting the automotive market.
“The question needs to be asked about whether the current regulatory approach to financing is appropriate, and if not, what harm it is doing to both the sector and the economy more broadly.”
Sales figures this year are indeed bad news for most manufacturers. Nine of the top ten selling brands in Australia recorded lower sales year-to-date than the same time last year. Toyota is hardest hit – though still the number one brand – losing 8253 sales YTD, while Kia (sixth on the ladder) is the only top manufacturer to buck the trend, up 861 units.
In total, Toyota leads the market, selling 139,349 vehicles YTD, followed by Mazda (70,889), Hyundai (59,244), Mitsubishi (55,516) and Ford (43,821).
The top selling vehicle for the month was again the Toyota HiLux (3674), followed by the Ford Ranger (3181), Toyota Corolla (2863), Hyundai i30 (2813) and the Toyota RAV4 (2006).