Luxury car sales swan dive

Via COMMSEC:

 CommSec Luxury Vehicle index: For around a decade, CommSec has been tracking an index of luxury vehicles. Changes at the ‘top-end’ of markets – vehicles, houses and other assets – have tended to lead activity more broadly. We update the latest trends in luxury vehicle sales.

 Luxury vehicle sales: The CommSec index of luxury marques peaked in the 2016 calendar year with sales totalling 106,658 units. In 2017, luxury vehicle sales fell by 5.7 per cent and sales fell by a further 8.9 per cent in calendar 2018. There were 91,642 luxury vehicles sold in 2018 – a 3½-year low.

 Home prices: The CoreLogic Home Value Index of national home price index fell by 1.1 per cent in December to be down 4.8 per cent over the year – the biggest annual fall in a decade. Home price growth started to slow from November 2016, around the same time that luxury vehicle sales started to soften.

More consumption smash.

Comments

  1. Luxury foods, too with the AFR reporting that Australia’s largest fruit and vegetable grower, Costa Group is down 39% after reporting an unexpected fall in tomato, berry and avocado sales last month.

      • Because mining Lithium requires massive quantities of water, slave labour and is generally not great for the environment. Better to keep an old ICE car on the road that’s in good tuned condition than build more more more cars. If you want to lower emissions go vegan :).

      • Better to keep an old ICE car on the road that’s in good tuned condition

        You’d be a fool to try to stay with an ICE vehicle. They’ll be banned eventually, and the fuels will be taxed bigly.

      • You’d be a fool to try to stay with an ICE vehicle. They’ll be banned eventually, and the fuels will be taxed bigly.

        Bans of ICE vehicles are comfortably decades away.

        Taxes on fuels might go up, but the economics of EVs are pretty good so people will likely move to them without much nudging, at least outside of more specialised use cases like offroading or towing caravans.

        They’ll come for the zillions of dirty two strokes in garden tools long before that.

    • By definition no, it’s based on cars above a certain price point.

      But I get what you’re saying. Unfortunately though, for many working families two cars are essential: especially if they have been forced to live away from their place of work and/or major train lines by the cost of housing.

      • So, foreigners who buy investment property near city centres and leave them untenanted are pushing up greenhouse gases in other ways we’d never considered …

        Over to you, the Greens

        Hello? Hullo? Crickets …

  2. Limp mode: anyone heard of it? its when your expensive European diesel SUV effectively shuts itself down to max 40km/h to protect the engine. The cause, apparently Diesel engines need to reach a certain temperature to clear themselves, however doing daily school runs and not cruising on autobahns as they’re designed for means the engine never reaches the desired temp. Its happened to a couple of people I know, ends up quite expensive.

  3. Diogenes the CynicMEMBER

    One of my neighbours had 7 cars of which he kept 3 at his house and the others with a caravan trailer in a warehouse. It seemed crazy to us with our one sedan – (our families were the same size) but different strokes, different folks.

  4. As a historical aside I remember when only rich people had luxury cars. These lyrics are from a 1986 Go Betweens song, Twin Layers of Lightning. Back then a Mercedes was still a special and not common place vehicle as the lyrics show

    “”She walks me home
    There’s a mercedes parked in our street
    So we stop and we discuss
    Who on earth the owner could be””

    It does not incite any level of curiosity any more of course, a penny for half a dozen these days. A borrowed penny in many cases, must keep up with the Joneses

    https://www.youtube.com/watch?v=FKPSKsmCKDo

  5. I see luxury car sales as a proxy for foreign money. It’s like every new chinese family that moves into a house pulls the trigger on a new merc or bmw. I think though they are seeing the light and moving to jap/korean makes now.

  6. Sales of luxury cars is not much of an indicator, as this affects a size population of high end earners and is it correct that luxury cars are majority leased?

    • All the ‘equity, mate’ types have to have two, else the missus goes ape because the mums at school all drive one. Second, all the muppets who think a flash car makes them cool and only think about how much a month they can afford, not how much cash they are throwing away by leasing the flashest thing the finance dude approves.
      I play golf occasionally with a guy who heads up a very big German auto manufacturer’s leasing firm in Oz. They have $5B on the books. He thinks there’s way too much house and sharemarket equity in Oz for any problem to befall his perfect slice of ticket-clipping world. I beg to differ…

      Played golf a while back with a BMW sales manager. He laughed when I asked how were so many people stumping up such big wads of cash to pay for Beemers and wildly over-priced Minis at his dealership. His answer? “No one does, they’re all financed.”
      We discussed how much money someone stumps up to drive a flash car on lease compared to buying outright and therefore how much extra they pay for the privilege. “I love the fact they’re all greedy and stupid” was his reply.

      • Yeah. I’m familiar with the books of the manufacturers’ finance arms. Can confirm mdsee is not exaggerating with the $5b.

      • MERCEDES-BENZ notched up a record sales year in Australia last year with a combined passenger car and SUV tally of 37,068 units, significantly more than its compatriot German rivals Audi (22,011) and BMW (23,619)

        $5B in lease value divided by annual sales x 5 year lease = $27k a year, or $2250 a month. That’s some serious pain.

      • We discussed how much money someone stumps up to drive a flash car on lease compared to buying outright and therefore how much extra they pay for the privilege. “I love the fact they’re all greedy and stupid” was his reply.

        Yeah, while I have some sympathy for people buying at the low end of the market on finance because they can’t afford outright but want the security and peace of mind of a new vehicle, I haven’t got any for people doing it for their egos.

        A sizeable chunk of people lease rather than buy because they think they’re getting one over on the taxman, as well.

      • msdee – similar story – my brother played golf with a bloke works in (or owns part of) a BMW dealership in Brisbane. My brother asked how all these young people were drivinf Beamers. he said – all financed on 75% residual. Also advised my brother never to buy one second hand – they can afford the payments but after the free service they are never seen again!

      • New car? BMW? Junk!
        Buy a second hand Toyota or Mazda – 30,000k on the clock – 15k for a Camry – go forever!
        European cars are one of the world’s great cons!

      • I’m with you there Flawse. Sold my 10 year old civic privately, $13k less than I paid for it and wrote off the depreciation and running costs through the company. Bought a new Mazda 3 for cash without going for all the extra fruit. Happy days after having owned expensive euros before those two. Better to have lots of extra USD than a Euro money pit on a finance lease!

      • When I bought my Navara ute a few years ago I looked at leasing. IIRC, for a vehicle around $50K I was looking at lease costs of $700 per week or nearly $3K per month plus a residual at the end.. Well fcuk that for a joke. I paid cash.

        Leasing works OK under certain certain circumstances, but most people with novated leases who think they’re Stickin’ it to Da Tax Man are just stupid chumps. Very similar to a lot of negatively geared property speculators.

      • haha, glad I came back to this thread, what a nugget.
        I considered novated leasing a Tesla due to my high income, but for the same reason I don’t negatively gear property, I just didn’t see the value. Sure I wanted a Tesla, but I also don’t like being tied into a job / role / company and income level. Not worth it.

        I’ve always had second hand cars, never had a new car. Not sure what it’s like? But it would have to be a really special car for me to buy new.

        I actually enjoy working on cars (even my daily/beater cars). I feel more self sufficient than if I was at the mercy of a dealership and having to pay them or take the car in for a service with them.

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