Australian car sales continued to hold up in January, as buyers seemingly downsized and slowed their switch to diesel and alternate fuel models.
In fact the small fall on January 2010, when sales jumped more than 11%, was better than it looked…sales in Queensland last month were hit by the floods, with the industry estimating 2,000 fewer vehicles were sold as a result of the wet.
The sales result again raises the question of whether the gloomy tone in retailing is realistic given that consumers are spending heavily on car purchases.
Official VFACTS data released by the Federal Chamber of Automotive Industries (FCAI) yesterday shows that 73,584 passenger cars, SUVs and commercial vehicles were sold in January (down 1.7% or 1,280 vehicles compared to the same month in 2010).
"This is a robust January sales result and provides a good start to 2011," FCAI Chief Executive Andrew McKellar said.
"It is encouraging to see that private buyers remained confident throughout January with sales to those customers up 13.6 percent while business purchases declined," he said.
Sales of new vehicles in Queensland were down 12.8 per cent or almost two thousand vehicles this January," he said.
A year ago January car sales jumped as vehicles bought by small business in December ahead of the ending of tax breaks, were delivered.
But January 2011 was the 4th best January for car sales so far recorded, so buyer confidence remains stronger than the consumer sentiment surveys might indicate.
Those deliveries spilled over into February of 2010, so sales this month might be off a touch as well; although the usual end of year clearance marketing campaigns haven’t slackened in the first six weeks of this year.
As retail sales, house approvals, purchases of big ticket items such as TVs remain weak, Australian consumers continue to want to own a new car in larger than expected numbers.
Sales in 2010 topped the million vehicle mark for only the third year ever and the industry is forecasting another year of similar proportions.
In fact car sales will get a boost from the floods in coming months as people in Queensland and northern Victoria replace flood damaged vehicles.
But the January 2011 sales figures show Australians are continuing to downsize – to the detriment of locally-produced large cars.
The new vehicle market has started the year with a solid result, albeit down slightly on last year due to a significant decrease in sales in Queensland.
Sydney analyst Fusion Strategy said yesterday that the January figures indicated some downsizing, but also pointed out that diesel and alternate fuel cars didn’t make much headway in the month, despite the rise in fuel prices.
Fusion’s Steve Allen said diesel’s share was steady at just over 24% of all sales and the total with other fuels was a fraction under 25%.
He said the figures were "a real mix; within this, Passenger just about holding, SUV’s just up, Light Commercial down and Heavy Commercial way down".
Growth was down in vans, sports, large passengers, people movers, medium passenger vehicles and medium SUVs. But sales were up in compact SUVs, with sales of luxury SUVs holding up as well.
Mr Allen said that the big growth in sales in January came in light passenger vehicles, small passenger and compact SUVs. He said all this was consistent with the "downsizing trend”.
Figures for the Ford Falcon, formerly Australia’s best-selling car, also confirm this apparent trend to smaller cars.
The Falcon managed just 1,157 sales in January, being outsold by more than three-to-one by the Toyota Corolla. The Falcon didn’t even make the list of the top 10 selling vehicles for January.
The Falcon was also outsold by the likes of the Hyundai i30 (1675), Getz (2167), Holden Cruze (2060), Mazda2 (1359) and 3 (3605), Mitsubishi Lancer (1670), Nissan Navara 4WD ute (1686), Subaru Impreza (1765) and Toyota Hilux 4WD ute (1580). All smaller, cheaper and mostly with better fuel consumption.
The Holden’s Commodore also saw below average January sales, managing just 2645 units, down 18.4% on the same time last year.
The upshot: a bad month for locally manufactured vehicles, with 7,248 sold in January, representing less than 10% of the 73,584 cars sold.
The drop in Queensland sales last month was around 12.8% of total sales and the FCAI’s Mr McKellar says, "We can expect sales in Queensland to be slower in the short-term but will pick up in the months ahead as people begin to look for replacement vehicles".
And even though the clearance sales skew model sales and sales overall (especially to those holding big stocks and desperate to quit them), sales of small cars – the biggest single segment according to the FCAI – jumped nearly 11% in month, while light (or city) cars grew by 16.9% as more an more importers piled into this rapidly growing segment.
Sales of compact SUVs were up 7.5% in the month.
Proving there’s still a demand for larger vehicles; sales of large 4WDs grew by 29.3%, although there were only 1,103 sold in total. That was a quarter of the number of new Toyota Corollas sold.
