Shares in Australia’s two major listed car dealers, Automotive Holdings Group and its 22% shareholder, AP Eagers both fell yesterday after the solid day’s performance seen on Tuesday.
Which was an odd reaction to news of a record car sales performance last month.
Automotive Holdings shares were up 3%, fellow car dealer AP Eagers, 2.3% (and 14% and 10% in the past fortnight to Tuesday), buy yesterday they both eased – Automotive fell 0.6% and AP Eagers shares dropped 1%.
That’s despite news that car sales hit an all time monthly high of 134,171 units in June as a combination of end of financial year offers, tax and buoyant consumer interest boosted buyer interest
It was the second strong month in a row – just as retail sales generally saw strong gains in April (1.0% seasonally adjusted) and 0.6% (in May, also seasonally adjusted).
The Federal Chamber of Automotive Industries’ VFACTS car sales report showed the 134,171 new vehicles sold in June, up 4.4% on June last year. Both months had the same number of selling days.
June is typically a strong month as dealers clear stock for the end of the financial year, while the accelerated depreciation tax deals provided a boost for the second year in a row.
The Federal Chamber of Automotive Industries said demand was, in the main, driven by the business sector with sales to businesses for passenger cars increasing by 5.7%, demand for SUVs up by 16.6% and light commercials by the same amount
The FCAI pointed to the highly competitive market, low interest rates and the Government’s instant asset write-off provisions were likely contributors to the June 2017 record result. The June sales spike now has 2017 year-to-date results tracking slightly above (+0.2%) first half of 2016.
VFACTS said sales of sports utilities jumped 11.7% in June, with the upper large segment rising almost 21%. Sales of light commercial vehicles climbed 12.2% while the heavy vehicle market added more than 9%.
Toyota retained first place with 18.3% of the market, while Mazda was second with 9.3%, closely followed by Hyundai with 9.1%. GMH and Mitsubishi ended with 6.9% each and Ford was on 6.6%.
All the states and territories, except Western Australia saw sales increases with Victoria leading the way with an 8.7% rise over June 2016. The South Australian market grew 7.9%, Northern Territory by 7.5%, Queensland with 5.5%, Tasmania 5.4%, NSW a 2.1% gain and the ACT 0.7%, Sales in WA fell 5.5%.
