Higher oil and petrol prices were partly blamed for the slower than expected rise in retail sales in May, but they have not dented our appetite for motor vehicles with the million unit sales mark cracked for the first time in the 2007 financial year when it ended last Saturday
Building approvals also slowed noticeably in May, along with retailing activity (on a seasonally adjusted basis) but car sales were up over the year, with much of the growth coming in the six months from January to June of this year when sales jumped 8.5 per cent.
The Reserve Bank stayed its hand on interest rates yesterday, no doubt influenced by the news that retail sales and building approvals were lower in May.
But the car industry has shaken off the impact of 2006's three rate rises, and those higher oil (and petrol), which peaked twice above $US70 a barrel in the 12 months to June.
The rising Australian dollar should start showing up in the lower prices of new, imported vehicles (but in parts?) which should help the inflation figures over the next couple of quarters.
The June quarter figures are due out at the end of July and the RBA is waiting on those before making a decisive move this year.
According to retail sales figures released yesterday by the Federal Chamber of Automotive Industries (FCAI), a total of 1,004,097 vehicles were sold in the 2006-2007 financial year, topping the previous best of 981,791 sold in 2004-05.
The Chamber said June was notable for being the biggest selling month in history.
"A total 105,097 vehicles were sold last month – up 8649 or 9.0 per cent on the same month last year. It was the highest sales for any month in the industry's history.
"This is an outstanding result for the Australian motor industry," said the FCAI's Chief Executive, Andrew McKellar. "The success is broadly based and includes almost every brand and vehicle segment."
For the six months to the end of June, motor vehicle sales totalled 524,376 – up 41,216 or 8.5 per cent on the same period of 2006.
Most of the extra volume in June was generated by the Light, Small and Medium passenger car segments which combined added 5244 sales.
In addition, the Large car segment was up 3.7 per cent and Upper Large segment which was up 28.3 per cent.
The Sports Utility Vehicle (SUV) market was up 4.9 per cent in June while the Light Truck Market was up a modest 2.0 per cent.
Toyota remained clear market leader in June, selling 24,539 vehicles – an all-time record for any brand in any month.
Holden held second place with 14,256 and Ford third with 10,304.
The FCAI says all indications are that the second half of the calendar year will continue the trend of the first.
"Given the current strong level of vehicle affordability, continuing high employment, rising incomes and asset values, we believe that vehicle sales will continue at this accelerated pace through the remainder of 2007," said Andrew McKellar.
Toyota's share in the first six months of the year rose to 22.2% (21.1%); Mitsubishi's was up slightly, as was Nissan's.
Holden's eased to 14.5% from 15.4%, despite selling more units, while Ford's share was lower at 10.4 % (compared to 12.5% in the first six months of 2006) as were its sales. Hyundai saw its sales drop, and its share slide from 8.1% to 5.1%.
Small car specialists, Proton (up 34%), Suzuki (up 43%) and Volkswagen (up 42%) all reported sharp improvements in their more economic models (and diesels in the case of VW). Mazda saw sales rise 20 per cent in the first half, as did Nissan.
