It would be fair to say that Australia’s new car market remains in a deep recession after February became the 23 monthly fall in sales in the last 24 months.
New figures from the Federal Chamber of Automotive Industries (FCAI) revealed new car sales fell 8.2% compared to the same period a year earlier. While that was a bit better than the 12.5% slump in January, it’s not very much different – it is still a sharp fall.
And it still indicates that demand from private and business buyers remains very weak, just like much of the economy where consumer spending (and some business) is a major determinant of sales and profits. It’s tough out there.
“The Australian new-vehicle market has now seen a downturn each month for the past 23 months. In economic terms, a recession is declared after two-quarters of negative growth – and this industry has now seen seven consecutive quarters of negative growth,” according to a statement from FCAI CEO Tony Weber.
“There is no doubt that this is an extraordinarily difficult time for the automotive industry.”
Mr. Weber said a number of adverse factors have directly affected consumer confidence over 2018, 2019 and the beginning of 2020, resulting in a tough time for the industry.
“These include political and financial uncertainty, environmental factors such as floods, drought and bushfires, and more recently, the growing concerns regarding a global pandemic from the coronavirus,” he said.
Sales in February were 79,940 new vehicles, 7,162 fewer than February 2019. Combined with the 12.5%in January, sales for the year to date (151,671) have fallen 103%.
Although February’s sales were weak enough, they’re still a lot worse still when compared with February 2018 when the number of vehicles sold was 17% higher at 95,999.
Toyota remained in the top spot for sales in February, followed by Mazda and Hyundai.
Shares in the country’s biggest listed car seller, APE Eagers rose 1.6% to $8.30 yesterday, but remain nearly 19% down year to date in 2020.
AP Eagers took over its bigger rival last year in AHG.