World oil prices rose sharply in October to finish above $US90 a barrel and rising, but the Australian dollar also firmed during the month and as a result the local price of petrol failed to reach the levels indicated by the global price.
And they went even further overnight, finishing at a record $US96.70 after topping $US97 briefly.
Traders said the $US100 a barrel mark could be in sight in the next few days if US oil stocks figures are again poor tonight.
The Australian dollar is above 92.50 USc and it's that cushioning effect on local fuel prices that's probably helped why Australian car buyers decide on fuel-drinking Sports Utility Vehicles in record numbers during the month.
The stronger dollar is also making imported vehicles a bit cheaper, or allowing the importers and dealers to be competitive in doing deals: that probably had something to do with the surge in SUV sales, and the better sales of small and light vehicles, all of which are imported.
Sales of four wheel drive vehicles are also up 15% so far this year, a sign of resistance to high oil prices and the rising debate over the environment.
Sales of locally made cars fell 17% last month, according to the latest figures and that's as much to do with the rising Aussie dollar as any other factor.
Certainly the boom in small, more economical vehicles has slowed a touch, although demand is still solid.
But that demand for SUVs hasn't spilled over into demand for six cylinder locally made cars like the Holden Commodore and the Ford Falcon, which is tanking.
The effect of the tax cut could be helping people finance a new car, while the jobs boom is no doubt leading to more confidence among consumers. The August interest rate hasn't restrained demand, nor as the small rise in the cost of personal loans and other non-mortgage finance from most major lenders.
But that boom in SUVs and a rebound in passenger car sales combined to deliver a record sales result for the automotive industry last month.
Official figures released today by the Federal Chamber of Automotive Industries this week show that a total of 89,289 motor vehicles were sold in October – an increase of 9,359 or 11.7% on the same month last year.
The result beats the previous record for the month of October, set in 2004, by more than 8,000 sales and for the first 10 months of 2007, the motor vehicle market is now up almost 70,000 vehicles or 8.6%, as it pushes to top the million sale mark for the first time in a calendar year. (It did it in the 2007 financial year to June 30.)
FCAI Chief Executive, Andrew McKellar, said the notable trend last month was the sharp rise in SUV sales, which jumped 3,827 or 27.5%. Year-to-date SUV sales are now up by almost 22,000 vehicles.
"After a decline in 2006, the SUV market has rebounded strongly as brands have launched new generation models – in many cases featuring enhanced economy and versatility," said Mr McKellar.
Mr McKellar said a slight dip in passenger car sales in September corrected itself last month.
The Small car segment was up 1472 or 8.3%, while Light car sales grew 1150 or 11.5%.
"The October result was in line with the long-term trend towards growing sales of small and light cars," said Mr McKellar.
Year to date an additional 10,028 Small cars (up 5.4%) and 8,946 Light cars (up 9.2%) have been sold.
The Large family car segment held steady in October (down just 0.8%) and year-to-date is now up 5414 or 4.8%.
Despite the strength in overall sales, Mr McKellar said the figures highlight the difficult competitive situation facing local car manufacturers.
"The combined market share of Australian-manufactured vehicles dipped to just over 17% last month," said Mr McKellar.
"The intensely competitive situation in the motor vehicle market is being driven to a significant degree by the ongoing strength of the Australian dollar.
"Given the current levels of vehicle affordability and price competition in the market, there is nothing in these figures that adds to the case for a further interest rate rise," he said.
Toyota was the best-selling brand in October, its total of 20,212 beating the combined sales of second placed Holden (11,415) and Ford (8,206).
Year to date Toyota now leads Holden by 71,360 sales.
Holden and Ford were among only seven of the 42 brands to not post a sales increase in October.
It is the first time Toyota has held such a strong lead over Holden and Ford and the company is on track to post its fourth year in a row as Australia's most popular car brand.
Holden's Commodore remained Australia's biggest selling car, but sales of the Ford Falcon were down 22% in the first 10 months of this year compared with the same period in 2006. A new Falcon is due in March,2008.
Sales of diesel vehicles are the fastest growing part of the market, up 60% for private use in the 10 months to the end of October, and 80% for non-private use.
Perhaps some of the demand for diesel vehicles is really for diesel-powered SUVs and four wheel drives.
