VFACTS: Car sales take 13 per cent hit in July

THE coronavirus pandemic is continuing to have a heavy impact on the Australian motor industry as demonstrated by the latest sales figures which show new-vehicle registrations fell 12.8 per cent in July to place the total market down 19.1 per cent for the year.

Figures released by the Federal Chamber of Automotive Industries (FCAI) today reflect the ongoing arduous conditions in the marketplace, which have intensified as Victoria – the nation’s second-biggest market behind New South Wales – tightens its restrictions further and takes Melbourne to Stage 4 as part of its ‘state of disaster’ response, prohibiting retail sales of motor vehicles on-site at dealerships until at least mid-September. 

Online sales are permitted.

A total of 72,505 new vehicles were sold across Australia in July, almost 10,700 fewer than the corresponding month last year and a sure sign of complicating factors beyond COVID restrictions, such as stock shortages and subdued consumer and business confidence. 

This follows the heartening result in June that produced only a 6.4 per cent year-on-year deficit after a torrid few months where sales plummeted 35.3 per cent in May, 48.5 per cent in April and 17.9 per cent in March.

Unsurprisingly, Victoria’s sales plunge in July – a month during which Melbourne was placed under tight Stage 3 restrictions that are now in force across the rest of Victoria – was the deepest across all states and territories, down 27.8 per cent (or 6743 units).

The smaller Tasmanian market was also badly hit, falling 22.6 per cent for the month, while New South Wales and Queensland limited the damage to less than 10 per cent, falling 7.8 and 9.1 per cent respectively. 

Western Australia held relatively firm with only a 1.0 per cent decline, South Australia slipped 5.0 per cent and the Northern Territory dropped 4.5 per cent. The ACT was the only anomaly, up 30.6 per cent for the month.

FCAI chief executive Tony Weber said the results, which represent the auto sector’s 28th consecutive month of negative growth, were not unexpected “given current market conditions and the industry’s long-term downturn”.

“The Australian automotive industry, like many sectors in the Australian market, continues to face challenging and difficult conditions, exacerbated by the advent of the COVID-19 pandemic,” he said.

“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.”

All major vehicle categories returned negative sales results last month, with passenger cars crashing 28.5 per cent and light commercials diving 10.8 per cent, the latter often seen as a litmus test for the health of the market – and the economy – given its reliance on fleet purchases, small business operators and sole traders in key sectors such as construction and agriculture. 

The market’s biggest segment, SUVs, were down 3.5 per cent last month, while heavy commercial vehicle sales were 9.3 per cent in arrears.

Toyota sold twice as many vehicles as any other brand but still suffered a downturn that was deeper than the industry average, its 15,508 registrations marking a 13.2 per cent decline. 

RAV4 emerged as the top-selling vehicle across the market in July, racking up 4309 sales (+78.1%), while Toyota’s two other big wheels, HiLux (2947, -12.3%) and Corolla (2192, -32.4%), were well down but certainly not out in the popularity stakes, placing third and fourth respectively.

The punctuation mark, in second place overall, was the Ford Ranger on 3104 sales (a slip of 2.0 per cent compared to July last year), while rounding out the top five was the Hyundai i30 on 1745 (-22.5%). 

Notably, only one other ute was found among the top 10 sellers – the Mitsubishi Triton in seventh (1593, +4.5%) – which reflects the general LCV tumble that owes plenty to weak performances in the 4x2 and 4x4 pick-up/cab-chassis segments, which were down 14.0 and 7.7 per cent respectively.

This appears to reflect an exhaustion of both supply and demand, standing in stark contrast to the strong sales performance of pick-ups last month during the end-of-financial-year sell-a-thon that was further fuelled by expectations that the federal government’s instant asset write-off scheme might not be extended.

Mazda placed second overall last month by limiting the damage to only a 5.1 per cent reduction in sales, to 7806 units, whereas Mitsubishi (4684, -10.7%) and Hyundai (4634, -33.6%) were well behind in third and fourth position respectively – and only just holding these placings with Kia hot on their trails in fifth. 

Indeed, Kia was one of only two leading brands to post a positive result last month, its 4625 sales representing a 2.6 per cent uptick amid a sea of negative returns. It was just nine units shy of Hyundai, and 60 short of a podium position.

Key to Kia’s fortunes is the all-new Seltos, which found 940 homes last month, while the Stinger sportscar made a useful contribution with 197 sales (+58.9%) to further offset stumbling volume-selling models such as Cerato (-29.9%) and Sportage (-8.2%).

The other brand to defy the industry’s downturn was Volkswagen with 3710 sales that signify a 2.8 per cent rise. This result secured it seventh position – behind Ford in sixth (4573, -6.7%) but ahead of Nissan which was down 23.6 per cent with less than 3000 sales on the scoreboard for the month (2906).

With Holden now out of the equation – it finished 16th last month with 1113 sales of its final supplies as it exits the market – the other minor placings now reflect the performance of the leading premium, premium-oriented and typically strong-performing mainstream brands with a limited line-up.

Subaru managed ninth place with 2864 sales, albeit an 18.5 per cent fall, while Mercedes-Benz Cars maintained a top-10 position – and a stranglehold on the premium vehicle market – with 2556 sales (-8.5%).

Mercedes’ major rivals, Audi and BMW, had mixed fortunes last month. 

Audi’s relentless new-model launch program paid dividends with 1315 sales – up 53.3 per cent over July last year, when vehicle supplies were heavily constrained – while BMW’s COVID-defying form this year was nowhere to be seen, the Bavarian band diving 42.5 per cent to 1011 sales.

As we have seen in earlier months, a handful of brands continue to find growth where otherwise the ground is bare, while green shoots are emerging for other marques.

The Chinese brands have all continued their growth pattern – MG (1115, +58.8%), LDV (722, +22.4%), Haval (335, +139.3%) and Great Wall (170, +41.7%) – as has Ateco Group’s locally converted Ram pick-up truck venture (280, +7.3%).

Jeep’s new Gladiator and its major ‘mea culpa’ advertising campaign are reflected in its 19.5 per cent sales increase last month (to 509 units), while others to perform well included Suzuki (1475, +26.8%), MG (1115, +58.8%) and Volvo (692, +23.1%).

Top 10 Brands July 2020

Top 10 Models July 2020