New cars to remain affordable

Tony Weber, the Chief Executive of the Federal Chamber of Automotive Industries (FCAI) has told journalists that it has never been cheaper to buy a new car.

Citing a vehicle affordability study yesterday, Weber revealed that purchasing a new Ford Falcon (pictured) will take an average wage earner 24 weeks in 2015. This is in marked contrast with 2013 (26.2 weeks) and back in 2010 (31.7 weeks).

But with the Australian dollar losing a lot of ground against the greenback in the last couple of years, there's a real chance that affordability will be eroded – especially for buyers looking at something other than the Falcon, which is built in Australia.

"Obviously over 90 per cent of the market from imports are exposed to the exchange rate, but lucky for the consumers... the competition is so red-hot in the market that the prices are still very low " the Chief Executive of the FCAI, told motoring.com.au yesterday.

"And you've got the other advantage that finance rates are very low. Sometimes we even have zero per cent finance rates. That's what's driving the market – because competition is so strong prices remain low, despite the depreciation of the Australian dollar."

Weber doesn't see the good times ending anytime soon, either.

"I don't think that people have any strong anticipation that the dollar will depreciate substantially from where it is."

According to Weber, all the indications are that the market in 2016 will remain very strong.

"Interest rates are low [and] there's more and more product coming into the market – we now have over 400 models in the Australian market, which is quite remarkable... We see it remaining strong into the future."

Not even the imminent end of local production in Australia will slow the market significantly, Weber predicted.

"Whilst [we have] had four really strong years in a row, we see that continuing."

Tony Cramb, Toyota Australia's Executive Director of Sales and Marketing, was also present for yesterday's announcement of total vehicle sales in Australia for 2015. He told journalists present that he was similarly confident the market would bear up in 2016. Toyota forecasts another year above 200,000 sales, which seems quite a conservative estimate if the overall market grows again.

"We see nothing in the economic environment, which would change the situation dramatically from where it is at the moment," Cramb said. "We were frankly a little bit surprised how high this year was, but there are no fundamental changes that we can see that would affect the market..."

As relatively benign as the country's economy may be – and more than perhaps the public perceives it to be – some brands in the local automotive market are struggling.

VFACTS figures reveal that almost every single FCA brand (including Jeep) sold fewer vehicles in 2015 than in 2014. It was the same for local manufacturers Ford and Holden – with Toyota only earning itself a reprieve by pushing Camry out the door with zero per cent finance. Sime Darby's two French brands, Citroen and Peugeot, both lost sales volume. Ssangyong and Proton also posted lower sales last year than in 2014. And two Chinese brands, Chery and Great Wall, left the market altogether.

What we can expect to see is new brands entering the market and selling so aggressively that they put other brands under considerable pressure. The local manufacturers aren't the only brands that may have to reinvent themselves in a tougher business environment.

But that should be good news for the consumer.