New vehicle sales in Australia jumped again in May to reach the highest monthly so far this year, driven by pent-up demand from last year and cheap finance and lease rates.
May was in fact the second month of the year to register more than 100,000 vehicle sales.
The continuing surge helps explain the continuing outperformance of list car retailers such as Eagers and the newly-listed Peter Warren Automotive, both of which upgraded earnings in late May.
Industry figures confirmed 100,809 vehicle registrations last month, the best May result since 2017 when 102,901 cars were sold.
But May looked good compared to a year ago thanks to the negative impact of Covid on sales in May, 2020 (59,894) – May’s result was up 68% on a year ago.
The biggest difference from a year ago is the impact of the more generous write off rules for tradies and others using vehicles in their businesses.
Light commercial vehicles again outsold passenger cars – 23,177 versus 20,218 sales – especially 4×4 utes. With 17,668 sales last month, 4×4 utes outsold the 17,012 of the next best segment, medium SUVs.
Ute sales passed 20,000 for May with both 4×4 and 4×2 combined.
With 456,894 sales so far this year and average monthly sales of 91,379, the market has the potential to reach 1.1 million units by the end of the year.
The impact of the lockdown in Victoria (especially the two-week shutdown in the main market of Melbourne) won’t be known until June’s results, as the restrictions introduced at the end of May didn’t impact sales in the state for the month.
SUVs continue to dominate, with 53,605 sales in May accounting for more than half the market and representing an 87% month-on-month increase. May was the strongest sales month for SUVs so far in 2021 as we approach the end of the tax year.
Small SUVs were the largest SUV sub-segment, with 14,717 units. While was up 118% from May 2020, the even smaller light SUVs were the biggest growth area in sports utility vehicles, up 223% month on month confirming that they are the vehicle of choice for more and more buyers.
Toyota was the top seller in May and for the year to date with 21,156 sales and nearly 100,000, respectively.
Normally June is a big month for sales being the end of the financial year, but with the instant write-off continuing, sales numbers should be softer than a couple of years ago.
