FCAI expects record sales to roll on

AUSTRALIA’S peak motor industry body, the Federal Chamber of Automotive Industries (FCAI), has predicted another year of record vehicle sales in 2018 on the back of the strong economy, despite some economic warning signs such as apparent stalled property prices in major capital cities.

Announcing record vehicles sales of 1,189,116 units in 2017, FCAI chief executive officer Tony Weber said he expected the car and truck sales growth to continue through the next 12 months, albeit by a small amount.

Asked how he thought the apparent end of the property boom in Sydney and Melbourne might translate to vehicle sales, he said he did not see any strong correlation between property prices and the vehicle market.

“Obviously there has been incredible growth in the property market in the major capital cities of Australia in the past 20 years, and that was always going to come to an end,” he said.

“I think that what we have seen with vehicles sales is solid, consistent growth, basically year on year, and that’s driven by the fundamental underpinnings of the economy which I see as remaining – economic growth, low interest rates and competition.

“I don’t see any of that changing, so I don’t see any strong correlation between the property market and the vehicle market.”

Mr Weber said he did not expect dramatic growth in the vehicle market, but still “another record year” in 2018.

Vehicle sales crept up 0.9 per cent in 2017, eclipsing 2016’s record of 1,178,133 vehicles to seal the industry’s fourth annual record in five years.

The growth was largely driven by strong vehicle sales in Victoria where consumers bought 339,343 vehicles – 13,074 more than in 2016.

Victoria’s economy has been powered by a building boom, driven mostly by population gains from interstate and overseas.

South Australia also recorded an increase of 1.0 per cent or 688 vehicles, but most other states, including New South Wales and Queensland, flatlined. Western Australia recorded the biggest fall, down 2.5 per cent or 2461 units.

Although business buyers bought fewer passengers cars in 2017, they more than made up for it with growing purchases of SUVs and light-commercial vehicles.