McMillan warns of car crash

More consumer warnings:

The failure of car sales to turn is one strong indication of how conservative the consumer feels.

David Llewellyn-Smith
Latest posts by David Llewellyn-Smith (see all)

Comments

  1. Only a matter of time before the spruikers start calling the return of the wealth effect. House prices going ballistic they reckon.

    • House prices going up just makes me feel poor, because I loath at the loan amount required to buy the next house.

      We have debt saturation right now, everyone is feeling it.

      • proofreadersMEMBER

        Nah – never been a better time to borrow. And would sir like some money laundering to go with the loan?

  2. What we need is a “car investor visa”. If the immigrant agrees to buy a car, then they get PR.
    That will fix teh thing!

    • Ideas man! Love it. I’m suspecting a cash for clunkers scheme myself. Judging by the number of car dealerships owned by Nick Zhao (the supposed Chinese spy who died mysteriously), you wonder how much of our industry is now owned by these types. If they have enough political pull they’ll want that public money transferred into their own pockets.

      • Don’t joke. My former neighbour owns a substantial dealership. Two and a half years ago he was complaining that the Gubbermint wasn’t doing enough to help motor dealerships!! I had to bite my tongue. If that’s how he was feeling then I suspect he’ll be crying like a p*ssy right now. 😉

        • He’s probably right. They fund Gerry Harvey, why not him and his mates?

          ‘Thank you Government, thank you Australia.’

        • Jimbo. I wonder how much dirt Gerry Harvey actually holds on various politicians. I’ll wager it’s plenty

  3. HadronCollisionMEMBER

    Well it’s also prices

    New ranger Navarra BT50 dmax triton etc are bananas

    Even with 1% interest

      • Don’t do it, from everything I’ve heard second hand Leaf’s are a money pit.
        Even a second hand Prisus is considered by many in the motor industry to be a money pit
        Maybe if you intend to do all the repairs yourself AND you understand how to repair Battery modules and fix “Electrical Issues” which confound your average Mechanic, than a second hand Leaf might make some sense, otherwise it is probably a very expensive choice for most drivers.

        • Thanks!

          I could best be described as “mechanically challenged”.

          I work at Sydney Olympic Park and love the idea of charging my batteries at the NRMA there.

          Am also toying with the idea of a second hand BMW i3, but > $30 grand is a bit much to justify the fuel savings

          • Maybe you can get lucky and buy a good low mileage Leaf but I all I’m saying is that I wouldn’t count on it.
            wrt an ICE power car any good mechanic can measure a few critical parameters and give you a thumbs up / thumbs down assessment but even that’s little better than a guess because these day’s it is much more likely that the Engine Management computer dies than that the engine itself wears out. With 10 plus year old cars either outcome normally results in the car getting towed to the scrap yard…the mechanical damage can be somewhat predicted and measured but Electrical damage is just a gamble.
            There’s also the problem that most local mechanics are completely unfamiliar with EV’s so they’ll tell you to take it back to the dealer and the dealers mechanics often follow repair procedures that benefit the dealer more so than the customer. If the battery has a single bad cell they won’t open up the whole string and find the bad cell because the approved procedure says to replace the whole battery pack. I don’t know the price of a Leaf battery pack but it is definitely more than $10K, so just one bad cell (out of hundreds) and the car will probably get junked. You can ask for a second dealer opinion but if the repair procedure is the same than the answer will also be the same.
            BTW most mechanics are terrible at diagnosing electrical faults and tbh from what I’ve seen the average mechanic F’ing about with a cars electrics is more likely to do additional damage than to ever fix the original problem.
            Hope that clears up why I’m not a fan of used EV’s (least ways not yet)

        • Yes, but think how virtuous he’ll feel while shovelling all that hard-earned ‘green’ into the bottomless pit.

        • The dirty ungreen secret of EV’s.
          The battery pack will only last a fraction of the lifetime of an internal combustion engine, and will likely cost more than the car is worth to replace when it fails.
          EV’s are destined to be scrapped far earlier for replacement with a brand new car than their IC equivalents.
          The real question will be what this means for people who currently drive 3rd and fourth hand cars if EV’s become prevalent. Will they just drive older and older existing IC cars, or will everyone simply get a brand new car every 5 to 10 years. Building all these additional cars sounds really environmentally friendly to me.

          • Will they just drive older and older existing IC cars, or will everyone simply get a brand new car every 5 to 10 years.

            Of course they won’t. Even if replacing a battery pack is required in an older vehicles and relatively expensive, it will still be a lot cheaper than buying a new car.

            Much like range, battery lifetime is an issue that is vastly overplayed. Eg: real-life Tesla data is showing that even pushing 200,000km, battery capacity is only down 7-10%.

            About 40% of registered vehicles are >10 years old and about 20% are >15 years old.

            Assuming the average 15,000km/yr, 15 year old vehicles have done about 225,000km.

          • LOL @ complaining about Tesla’s trustworthiness and integrity then linking to John Cadogan.

          • No idea what a new IC engine costs, but a rebuild is maybe a few thousand, but really a moot point. IC engines will last longer than the body/interior in most cases.

            I’m not sure bob really has any more credibility
            “Cameron, EV manufacturers don’t drop their ‘old’ batteries in landfill. Most are recycled to 3rd world countries where they will last a very long time and used to power lights, appliances in homes. Just because the old batteries won’t work in EV’s doesn’t mean to say they’re trashed.”

          • Heres a final thought for you guys to ponder,
            “Nissan has introduced a subsidised battery exchange program for vehicles sold by its Australian dealers. Nissan Australia will exchange a working 24kWh battery, with a state of health of 8 bars or less, with a new 24kWh battery for $9,990 plus the cost of fitment. ”
            And a dealer unaware of the “subsidised” program set a price of $30,000 + gst give or take for the battery.
            This tells me the actual cost of the battery is $30,000. If EV’s become widespread, how long do you think manufacturers will continue to subsidise the batteries?

          • No idea what a new IC engine costs, but a rebuild is maybe a few thousand, but really a moot point. IC engines will last longer than the body/interior in most cases.

            In practical terms, you will get 10-20 years out of most EVs the same way you get 10-20 years out of most cars today.

            Yes, there will probably be some range reduction as they get older. From what the real-life data seems to be saying, around 20%. This will also improve over time with technology.

            “Oh noes EVs will need replacing in less than ten years” is a laughable beat-up. It’s not even true of EVs you could buy ten years ago, let alone ten years into the future.

            This tells me the actual cost of the battery is $30,000.

            Er, really ? Because what it says to me is that the battery probably costs $10k and Nissan are running a tax dodge. Straya !

            If EV’s become widespread, how long do you think manufacturers will continue to subsidise the batteries?

            Why would you think the costs to fix relatively niche, typically high-end luxury vehicles today will not dramatically reduce as the technology becomes mainstream ? Do you think it costs as much to diagnose and repair a fuel-injected car today as it did in the ’80s when they were still relatively uncommon ?

      • I don’t know if Fisho is right, but I have bookmarked several Nissan Leaf’s for sale on CarSales and found they are not moving (not selling). Not sure if it’s because they are a money pit or people are afraid of electric?

        • The link I posted above shows what looks like an actual quote from a nissan dealer in the ACT to replace the battery in a leaf for $33k.
          How much life is left in a 6 or 7 year old battery in a leaf? What would you do if you owned one approaching battery replacement if it was going to cost you $30,000.
          I wouldn’t be going anywhere near one if it was me.

          • Yes that’s an extreme case of stupidity on the dealer side. As if anyone is going to pay that to replace batteries. Having said that there was a study that suggested Tesla battery packs will last 20 years with only small efficiency losses over that time period. That’s far longer than most internal combustion motors last and in fact the body work is likely to fail before that. Although modern car rust proofing is quite good and it seems 20 year old cars do not suffer the same rot as cars from the 70s/80s did.

          • “That’s far longer than most internal combustion motors last.”
            Thats actually completely untrue. IC will easily last that long. And most IC cars aren’t actually junked because they are actually broken in any significant way, but merely because the repair would cost more than the $1000 the car is now worth.
            A $10,000 battery replacement cost is going to see cars scrapped a lot younger than they currently are.

            https://www.carsales.com.au/cars/?q=(And.Service.Carsales._.Year.range(..2000).)
            Its amazing, currently 8000 cars for sale 20 years or older on carsales, presumably with functional engines. And given it costs to list I’d be betting a far lower proportion of cars that age are actually sold there.

          • “Having said that there was a study that suggested Tesla battery packs will last 20 years with only small efficiency losses over that time period. ”
            I have to ask if that study was done by the same team that said the tesla semi was practical and going to be ready in a year?

          • No telling how many times an engine or gearbox has been rebuilt in these 20 year old cars. The ones on carsales are the ones that have survived for 20 years. Many others would have been scrapped earlier because of an expensive mechanical failure. Modern cars are very complex (and their engines with them) and require ongoing maintenance that simply won’t be required on most electric vehicles. I love ICE’s but I see many advantages of electric, especially for non gear heads.

          • “No telling how many times an engine or gearbox has been rebuilt in these 20 year old cars.”
            The answer is almost certainly none, for anything from the 90’s or later. Engine longevity has improved since the 70’s.
            I was recently rebuilding a jet ski motor and looking for an engine machining shop was like looking for rocking horse poop, they are almost non existent these days, and the ones that are, are working on race, hi performance or old engines. Car engines simply don’t need to get rebuilt any more.

        • Personally I wouldn’t have a problem buying an EV but from what I have heard I’d still be choosing something other than a Leaf.
          Part of the problem is that there are no Generic cheap OBD2 scanner tools for diagnosing EV problems, nor do most local mechanics have any experience with EV’s. Try going to a mechanic with a description of some shudder when you accelerate and he’ll be clueless as to the likely causes with an EV yet able to diagnose the problem accurately driving once around the block with an IC engine.

          there’s a lot more to this than some simplistic answer that Electrical motors can last for 40 years. While that is true for something like an 3 phase AC Induction motor it’s not true for Brushless DC (Now what does it feel like to drive a BLDC motor powered car when one of the phase’s is intermittent or one of the IGBT’s is somehow dying?)
          Lot’s of unknowns equals lots of expense for even the simplest of repairs.

    • Prices have never stopped anyone before. In fact, the higher, the better. Sounds more impressive over a good BBQ. P1ssing contests.

  4. JUSTIN CARSLAKEMEMBER

    How about removing the luxury car tax to stimulate car sales ? We don’t have a car manufacturing industry anymore so no need for a tax to protect it

    • Sure that may be true but I like the idea of taxing rich, posing wankers more than the rest of us.

    • Where will the money come from?

      In Victoria, the changes unveiled in the recent state budget apply an extra luxury car tax at a rate of 7 per cent for vehicles priced over $100,000 and an extra 9 per cent for cars valued at higher than $150,000. Queensland’s “premium motor vehicle duty” on cars over $100,000 came into force last year.

    • Cadogan just gives recommendations on brands he is affiliated with. He’s lost even more credibility now that he’s trying to look like the guy from unbox therapy. The baseball hat and stubble just looks like a lame attempt to look youthful and relevant.

      Scotty Kilmer is the guy you should be listening to – https://www.youtube.com/watch?v=WRBmvQXh9kU

        • Its common knowledge that the 90s was the golden era for Jap cars.

          If you want rock solid reliability over the long term you go for Toyota and Honda. Theres no better endorsement than the fact that Toyota is the default choice for mining companies and has been so for decades.

          • Agreed! I had a 1996 Camry (bought when it was 2 years old) for 14 years!
            Would have loved to have driven the Camry Vienta, 3 litre V6.
            I still see mid 90’s Camrys on the roads of Melbourne.
            They did make damn good cars.

          • You can get the current Camry spec’d with the 3.5L V6. If only they dumped that motor into the new Rav4 instead of going hybrid…

        • Toyata Celica’s to be precise, but rev up those engines!

          I agree though 90s JDM is the King of cars. Buy a Toyota Chaser (1JZ) the 1JZ and 2JZ are some of the best engines ever. Along with RB engines. :).

          The quality of Japanese cars in the 90s was some of the best out there and easy to fix/repair. Unlike the modern stuff..

          • The modern stuff has gotten far too complicated.
            This is partly to do with having to comply with increasingly strict emissions controls, the push for greater efficiency, safety systems, complex electrical systems etc.
            The current Camry, despite selling reasonably well, is a bit weird looking, has an ugly asymmetrical dashboard/console and lacks decent headroom. It’s no wonder that more people than ever are going over to small and medium SUVs.

          • I agree on the complexity of systems. I spent 5 hours on the weekend removing an old alarm system from my 48 year old Datsun 240z and that is very basic by comparison to the modern stuff..
            https://imgur.com/a/lYT7jOW
            Still took me hours to figure it all out. I can’t imagine debugging issues in modern CANBUS driven cars. It’s all driven by regulations/safety/emissions for sure, but we’re building cars that cannot be serviced by anyone at home. So you become dependent on locked down propriety software that needs to be jail broken in order to just read what it’s doing.. madness.

          • On the upside, you can get 300+ horses out of a 2L engine that will drive for 10s of thousands of km without even an oil change (not saying you should, but they will) and they can’t be stolen by someone with a coathanger, a screwdriver and a hammer.

          • I know DrSmithy, modern cars are very good in many respects. Pro’s and Con’s and all that.

  5. I was always told that you buy a new or near new car, just extend the mortgage a bit to pay for it as it’s the cheapest loan you get. And mortgage repayments aren’t a problem after a few years because your pay rises compound. Get into the home owners club and you’ll be right!

    Lack of wage growth is the big untold story killing the car industry. Somehow I doubt Aussies have lost their enthusiasm for motoring. Until wage growth picks up (har har har…) the car industry won’t see a substantial turning point.

    • China PlateMEMBER

      Not sure about sticking it on the mortgage, sure its a cheaper interest rate but you’re paying it back over 10, 15, 20 years.
      A 5 year loan at a higher interest rate may work out cheaper in total.
      I’m assuming no extra repayments

  6. I think there is a fair people postponing a car purchase because they know a cheap to buy EV is on the way in the next few years. EV’s are cheaper to run and already have lower TCO, they are less complicated so will last longer. Batteries are dropping in price by 10% to 20% each year. I am waiting for an SUV version with decent range that does not cost $100k – I think there will be one on the market in about 3 years for the same price as my current Skoda Kodiaq.