Market nerves and retail confidence

Accountants at Broadmeadows are proposing a figure of 1,030,000 cars sold into the Australian market by the end of the calendar year.

Relaying this information to journalists at this month's media briefing, Ford Australia president, Tom Gorman admitted the difficulty in pinning down the total year's sales for 2007 in a credible forecast.

Commenting on apparently conflicting forecasts from Toyota's John Conomos (more here) and Mazda's Doug Dickson, Gorman drew on sharemarket fluctuations to make a point about the new car market.

"We're seeing immense volatility at the moment. We're seeing 2 per cent daily movements, out of Wall Street. I think that causes people to be more cautious.

"(In) our view of the industry... (sales) should be significantly higher than 'a million thirty', but we actually do see some tempering of that, based on a rate rise, based on an election coming at the back end of the year -- and now based on the volatility of some of these equity markets.

"People have (enjoyed) enormous growth in wealth in the last ten years in Australia. In the last three or four years, it's been enormous.

"Do people just build in this expectation that every year 'I'm going to get double-digit growth' and have started to live to that... and if that's the case, then you're going to see a little bit of a slow-down."

Ford's diffidence has manifested itself in a supply problem for the Focus, which could have sold an extra thousand units last month -- in Gorman's view -- but the company had reduced supply of the old model in anticipation of the new 'LT' generation.

Nobody can foresee how long the current record sales will last and whether the burgeoning economy can sustain these sales, but -- as for other companies -- Ford will be hoping it continues quite a while yet.

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