Last month the spin from some economists to explain the continuing strength of car sales was that April’s sales figures had been boosted by vehicles still being delivered to business buyers from the sales boom late in 2009 which was driven by the now ended tax breaks.
The explanation for April might still apply, but the impact of delayed deliveries must be very faint five months after the tax break ended.
In fact the very strong car sales figures are at odds with the sluggish state of the broader retailing market.
While discretionary spending seems to have slumped, that’s not the case in cars.
A month on and we’ve had another strong month: in fact last month was the best May ever with over 89,000 cars sold, including a sharp rise in passenger vehicles, SUVs (many diesel) and a surge in small car sales as well.
The record sales figures in Australia were not matched in the US, which saw a solid month in May, with sales boosted by high level of sales to rental fleets by Ford and GM.
US sales rose 19% and topped 1.1 million vehicles, the seventh consecutive month that sales have risen from year-earlier levels.
That’s an annual rate of around 11.6 million units, with some 8.8 million of those retail sales, down a touch from the 8.9 million rate in April.
The remainder are sold to fleets, either rental or corporate.
In Germany production was up 10% because exports (especially of Mercedes and BMWs to China and the US) are going well, but registrations fell 34% as private and business demand remains weakened by the stunning success of the five billion euro car scrappage scheme in 2009.
German registrations fell by more than 2% in May from April, in contrast to the US and Australia where sales rose both on a month-to-month basis and on a year-on-year basis.
In Australia the Federated Chamber of Automotive Industries said 89,218 new passenger cars, off-road and commercial vehicles hit the road, an increase of 13,777 or 18.3% on May last year, and beating the previous May record of set in 2008 – before the global financial crisis hit – by 578 vehicles.
May’s sales were also more than 7,800 up on April’s figure which was close to an all time high as well for that month.
Virtually all of the major categories of cars saw dramatic sales increases last month and among passenger cars, sales of light cars increased 21%, small cars 31.7%, medium-sized cars 18.2% and large cars edged up 3.1%.
Four-wheel-drives and Sports Utility Vehicles saw sales up 38%.
Among these types of vehicles, sales of compact off-roaders jumped 30.3%, medium-sized models rose 31%, large ones 26.9% and luxury offroaders saw a 17.4% rise in sales.
Sales of pick-up/cab chassis vehicles (many diesel as well) jumped 21% in the month. Sales of these vehicles had surged thanks to the tax credits last year, but demand still seems to be solid.
The FCAI CEO, Andrew McKellar, said in commentary that the sales figures were "demonstrating a genuine recovery in the marketplace. While recent months’ sales were largely driven by business sales, the figures indicate private buyers are again venturing back into the showrooms."
Of the 50,450 passenger cars sold last month, 28,936 were sold to private buyers, an increase of almost 6000 cars, while sales to business, government and rental fleets remained fairly static, compared to 12 months ago.
Toyota retained the top selling position in May with a market share of 20%, followed by Holden with 12.8% and Ford with 10.1%.
In the four months to April, 422,446 vehicles have been sold, an increase of 19.9% compared to the first five months of 2009.
