The Federal Chamber of Automotive Industries (FCAI) has released new car sales data for March.
The data shows that a record 109,647 cars were delivered during the month, surpassing the previous March record of 106,988 in 2018.
The January-March result of 304,452 sales constitutes the biggest-ever first quarter for new car sales, up 13.2% from the first quarter of 2023.
FCAI Chief Executive Tony Weber said it was impressive that the industry has achieved record sales results nine times in the last twelve months. Since April 2023, the sector has brought 1,252,230 new cars to market.
“This is a terrific result for the sector however, all car brands are well aware that these results cannot be taken for granted”, Weber said.
“We need to factor in the ongoing cost of living pressures and the challenges for industry and consumers that will emerge with the introduction of the New Vehicle Efficiency Standard (NVES) in less than nine months”.
The SUV sector accounted for 58.9% of sales, while the passenger segment fell to 16.1% from 17.7% in 2023. The Light Commercial category declined to 21.0% from 22.6%.
The following charts from CommSec show that sales of luxury cars are booming:
We all know which cohort buys luxury cars: cashed-up baby boomers.
Baby boomers increased their savings by 6.5% in 2023 despite spending more than other cohorts:
As shown above, households aged 55-64 and 65-plus recorded far more robust spending growth in the year to 7 January than younger age cohorts.
The divergence is most significant concerning discretionary spending, with younger households aged under 45 outright cutting spending.
In contrast, households aged 55-64 lifted discretionary spending by 2.8% and households aged 65-plus lifted their discretionary spending by 3.7%.
Most baby boomers do not experience rising rents or mortgage payments because they own their homes outright.
Most boomers are also earning higher interest rates on their savings while being insulated from rising income tax payments.
The reality is that baby boomers are the only cohort with the free cash flow and savings to binge on luxury cars.
The rest of us are just trying to financially keep our heads above water.
