The Federal Chamber of Automotive Industries today released estimates of new car sales for the month of October, which recorded a 3.1% fall in car sales over the year. Passenger car sales fell by 4.6% over the year whereas heavy commercial vehicles sales fell by 3.6% and sales of new light commercial vehicles were down 5.9% on a year ago. However, these falls were partly offset by an 1.7% increase in sales of sports utility vehicles (SUVs), where a record 327,599 SUVs were sold in the year to October, accounting for 29.3% of the total market (see below table).
The shift towards SUVs is illustrated by the below chart, which plots ABS new car sales data (current to September 2013). Note the clear uptrend in SUV sales since late-2011:
I’ll confess that I have never understood why there is such strong demand for SUVs. Surely with petrol prices at $1.30 to $1.50 per litre, SUVs are becoming very costly to run. And yet demand continues unabated. Weird!
