April car sales down 4.5%

Adam Carr won’t be happy. He’s relied on growing car sales in part to rationalise his intense campaign for rate hikes. Westpac has just released a note on the April sales figures from the Federal Chamber of Automotive Industries and it’s into reverse I’m afraid:

Westpac Economic update

Australia: new vehicle sales down 4.5% in April, partly as insurance-funded replacement buying wanes but also suggesting soft underlying conditions

Raw figures from the FCAI released today show a very weak sales result in April.
We estimate that the unadjusted figures are consistent with a seasonally adjusted monthly fall of about 4.5%, with sales down 9% on a year ago.

The size of the monthly decline is being exaggerated by a wind-down in insurance-funded replacement buying related to the severe weather events earlier in the year.
This had driven a 3.4% rise in March.

However, the April fall more than reverses this gain and suggests underlying conditions are soft, particularly for consumer-led segments – passenger and SUV sales pushed to new lows (see chart 2).
This is also backed up by the state detail which shows the most pronounced weakness is in sales ex Qld.
Any impact from the Japanese tsunami would probably have been minor in April, with scope to draw on existing inventories or delay delivery (the data records sales rather than deliveries/registrations).

Overall, the picture is not unduly weak but sales are softer than expected – lead indicators from the Westpac-Melbourne Institute Consumer Sentiment survey have been fairly upbeat, with responses on whether now was a ‘good time to buy a car’ suggesting consolidation rather than declines. It may be that this is reflecting the high AUD and associated reductions in the cost of vehicles rather than genuine intentions to purchase.

As I said earlier this week and last week. Car sales were distorted by flood replacements. Back to the real trend: weak. Bravo RBA.

Comments

  1. I earn a lot through primary and trading and drive and 8 year old sedan with 120K on the clock. I have my eye on some nice wheels but it pains me to pay 100% more than my couterparts elsewhere to protect the local crap. Of the local crap very little is manufactured locally. I remember test driving a Focus for a friend and I commented about the European interface – “no mate its Ford Australia” – “Er no mate (bogan), its European designed and South African made”.

    Slackjawed idiot.

    The whoop about the Cruze. The Holden Cruze is the Daewoo Lacetti. Slackjawed idiots abound.

    • The_Mainlander

      Your 100% correct.

      Also the motor industry works even more collabortaively than the average ‘Bruce comnsumer’ would ever believe.

      Renault… no it is a Skoda… 😉

      1000’s of exampls abound.

      Research from the Ford Territory was shared with Mazda for their CX7’s etc… Oh yeah Ford own Mazda.

      LOL>

      • Actually, a Skoda is part of Volkswagen/Audi group and uses previous generation VW platforms.

        The Ford Territory shares NOTHING with a Mazda CX-7 and actually shares 60% of parts with the AU/BA Falcon.

    • It pains to read such comments. I work for an Automotive component supplier. People who do not work in the Australian automotive industry have no justification to criticise it. We are tiny compared to the global players. Do people not understand the economy-of-scale business model? The funds available to design and develop cars in Australia is constantly reducing which is making the task of both updating models and long-term survival prospects difficult. And furthermore, the Territory is based on the Falcon platform, it does not share anything with the Mazda CX7. Ford sold it’s controlling stake in Mazda in 2008.

      • If Australia don’t have a comparative advantage in this industry then we should not be involved in it. As a country we would be far better off scrapping the rediculous tarrifs and subsidies for the local car manufacturers and importing from overseas.

      • Isn’t this website banging about the hollowing of Australian manufacturing and saying we should broaden our economy so that any future economic shocks can be absorbed by the country?

        Surely ensuring we have the capability to design and build cars from the ground up would be a pillar of this economic diversification.

        Also, understand that tariffs on cars are only 5% on imports.

        I also challenge you to find any major industry or major company in Australia that doesn’t run to government (state or federal) for handouts in subsidies, tax cuts etc.

      • Don’t forget the luxury car tax.

        With all respect Robert, if you can justify why one more dollar should go towards subsiding the car industry (does anyone really think $500 million for the green car scheme was anything other than a subsidy?) rather than going towards a hospital bed, safer roads or welfare for vets, I am all ears.

        Until you can, I have to inform you that your industry is supported by the tax dollars of Australian citizens and the inflated price consumers have to pay due to tariffs and luxury taxes. The car industry is not a golden child and should not be supported more (or less) than any other industry. Rather, it should be able to turn a profit on its own merits.

  2. I’m surprised that the word oil is not mentioned. I do feel sorry for my fellow commuters in their luxurious and terribly inappropriate 4wd and 2wd suvs.

    • The rise in oil prices has been negated by the “strong” (sic) Aussie dollar Gavin.

      But this will come home to roost. I’m glad we drive vehicles that use less than 6L per 100km at The Prince’s “Mansion”.

      Q – well said. As much as I love cars, the engineering behind them and the skills involved in the design, Australia cannot compete on a global stage – even with government support.

      Its time to cut the strings and put those automotive workers into the mining industry where their skills are better utilised.

      Even though this does not broaden the economy, it is a better use of resources in the medium term.

      The best long term use is through education/skills training and funding research, science and engineering to focus Australia’s tiny capital (both human and physical) into high end products.

      Funnily enough, an RSPT, combined with a proper tax on property (i.e remove NG, double/triple/quadruple CGT) would have helped in that regard.