No party lasts forever and it appears the slowing economy in this country, has finally brought the previously storming new car market to heel. Official VFACTS figures released today by the Federal Chamber of Automotive Industries (FCAI) show that 77,324 cars, trucks and buses were sold in August - down 10,882 vehicles (-12.3%) compared to the same month last year.
The FCAI is pointing the finger at rising interest rates and has welcomed the Reserve Bank's recent decision to drop the official interest rate by a quarter percent.
"The August downturn reflects the broader slowdown in domestic demand which is largely attributable to previous interest rate rises. Yesterday's official interest rate cut is a welcome move and will help renew future confidence in the marketplace but unfortunately the figures suggest it may have come too late and further reductions may be necessary," FCAI Chief Executive Andrew McKellar said.
There is also evidence that the luxury car tax fiasco, instigated by the new Rudd government, has also had a negative effect on sales in the luxury segments, which fell by 19.3 percent compared to the same month last year.
"There is clear evidence that the slowdown has been compounded by the proposed hike in the luxury car tax and wider economic uncertainties. This unnecessary and unfair tax grab is continuing to have a damaging impact on the Australian car industry. It is economically irresponsible to persist with this measure in the current circumstances," Mr McKellar said.
In what amounts to continued bad news for our local manufacturers, sales in all segments of the passenger vehicle market were down. Even sales of Sports Utility Vehicles (SUVs) were down with the exception of the SUV large segment, which surprisingly increased 23.3 percent in August.
In spite of the downturn, there were two strong performing segments in the commercial vehicle market - light bus sales were up 55.9 percent and also vans, which saw an increase in sales of 17.2 percent during August.
As expected, Toyota once again took the top spot in August with a 22.9 per cent market share, followed by Holden with 13.8 per cent and Ford with 11.1 per cent.
Year-to-date, Toyota leads the sales race with 165,641 vehicles sold, followed by Holden with 88,969 and Ford with 72,536 vehicles.
Year-to-date new vehicle sales are up 0.7 per cent on the same time last year, with 703,995 vehicles being sold. If this new trend towards lower sales volumes continues, and we expect it will, then reaching one million sales for the second year in a row is looking increasingly unlikely.