The Federal Chamber of Automotive Industries (FCAI) yesterday released new car sales for the month of July, which revealed that sales have collapsed to December 2009 levels following 28 consecutive months of decline:
New car sales fell by 12.8% relative to the same month of 2019, with annual sales volumes 22% below their March 2018 peak.
According to FCAI CEO, Tony Webber:
“The Australian automotive industry, like many sectors in the Australian market, continues to face challenging and difficult conditions, exacerbated by the COVID-19 pandemic.
“The extended Stage 4 Restrictions which have now been invoked in Australia’s second largest market, Victoria, will no doubt further challenge the industry during the coming months”.
Meanwhile, import data released on Tuesday by the Australian Bureau of Statistics revealed that motor vehicle imports collapsed to their lowest level since the Global Financial Crisis in 2008, down 59% year-on-year:
This suggests that unsold inventory is piling up at dealerships amid the collapse in demand.
A few months back, The AFR warned that many Australian car dealerships were “expected to collapse within months” amid razor thin profit margins and shrinking sales. Victoria’s car dealerships were cited as being especially exposed.
The situation has obviously worsened since then, with Victoria’s hard lockdown likely to be the last straw for struggling dealerships in the state.