Small-car Sales Move Into Reverse
The Age
Thursday October 4, 2007
NEW-VEHICLE sales continued to slow last month as the national market showed signs of saturation, especially in small cars.
Registrations of new cars and trucks were up 4.5 per cent compared with the previous September. But this growth was well below the year-to-date increase of 8.8 per cent at the end of August.The softening in the market after five years of strong growth could be the prelude to a period of relatively flat sales, said market analyst Richard Johns."We have had a huge hike in volume over the last 12 months and, in the bigger picture, over the last five years," said Mr Johns, the principal of Australian Automotive Intelligence."There are only so many people who can keep buying new cars." He said the market had essentially caught up to the level expected for a population the size of Australia's .Mr Johns said new-vehicle sales slipped from historical levels during the 1990s and this "gap" had now been recovered."In a broad sense, we think the market will flatten out for a few years, although it will fluctuate a bit," he said."It will exceed 1 million units this year, but we expect it to hover between 950,000 and 1 million units in the next few years."The weakness last month came in the small-car market, where sales of 17,944 cars were 10 per cent below the 19,946 units sold in September last year.Medium cars were 7.8 per cent below the year-ago level and large cars were down 1 per cent, according to Vfacts registration figures published by the Federal Chamber of Automotive Industries. While acknowledging the 2.3 per cent drop in overall passenger-car sales, FCAI chief executive Andrew McKellar said the decline was "narrowly based" in the small-car sector.Toyota reported that supplies of its new Corolla range - the best-selling small car - were "extremely constrained" last month due to the earthquake in Niigata, Japan, that disrupted production of parts."The overall motor vehicle market remains very buoyant and it is notable that sales of larger vehicles such as SUVs (sport utility vehicles) and four-wheel-drive utilities are up significantly, suggesting consumer confidence remains high," Mr McKellar said.He said there could be a further surge in new-car registrations after the Sydney Motor Show, which the FCAI promotes."The automotive industry has geared up for a big sales push in the last quarter of 2007, based around the launch of significant new volume models at the (Sydney motor show)," he said.A bright spot for the local industry last month was a return to more reasonable results for the Mitsubishi 380, which recorded 1045 sales. While small in industry terms, the return to sales above 1000 a month is a healthy boost for the company, which reported a $118 million loss in the financial year to March 31 (down from $226 million).KEY POINTS ? Softening in the market "could be the prelude to a period of relatively flat sales".? Industry is planning a big sales push for the last part of this year.
© 2007 The Age
