New car sales plunge for 27th consecutive month

The Federal Chamber of Automotive Industries (FCAI) has released its new car sales report for June, which saw annual car sales collapse to their lowest level since January 2010:

It was the 26th consecutive month of decline, with annual new car sales now running 21% below their March 2018 peak.

That said, new car sales did experience a season bounce in June, reflecting EOFY campaigns, fiscal incentives, and pent-up demand following COVID-19 restrictions:

The Federal Chamber of Automotive Industries (FCAI) has revealed an uptick in new vehicle sales during June 2020, with a total of 110,234 vehicles sold during the month.

While this represents a decrease of 6.4 per cent over June 2019, it is the strongest result since the beginning of the COVID-19 crisis which saw March sales down 17.9 per cent, April sales down 48.5 per cent and May sales down 35.3 per cent.

FCAI chief executive, Tony Weber, attributed the slight recovery to the easing of COVID-19 restrictions, seasonality, the extension of the Federal Government’s instant asset write-off scheme, and brand and dealer pro-activity.

“Some states have seen the easing of COVID-19 restrictions, and this has increased floor traffic through dealerships,” Mr Weber said.

“In addition, June is traditionally a very strong month for new vehicle sales. The End of Financial Year campaigns are well known, so it’s an excellent time for businesses and consumers to replace their vehicles…

“The extension of the Government’s instant asset write-off scheme has also been a positive influence. This program allows businesses to bring forward tax deductions for eligible expenditure…

Despite these ‘green shoots,’ June represents the 27th consecutive month of decreasing sales for the automotive industry, a fact which, over time, has been attributed to a number of environmental, political, financial and health issues within the Australian market.

Recall that car imports collapsed to 10.5 year lows in May, suggesting that a surplus of unsold stock has built-up across car dealerships and a lack of demand:

These are dark days for car dealerships.

Leith van Onselen

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