Positive trends for new-car sales

Yet another senior executive at a car company has announced an improvement in Australian new-car sales since the May 18 federal election.

Speaking with journalists for this week's local launch of the new Mercedes-Benz A-Class sedan and the Mercedes-AMG GT 4-Door Coupe, Mercedes-Benz Australia CEO Horst von Sanden revealed that Mercedes-Benz sales are beginning to turn around.

The brand is still 2000 units behind its January-to-May sales numbers in 2018, but there has been a rapid escalation in orders during June, von Sanden explained.

"We obviously had a pretty challenging 12 months – not only us, but we as much as anyone else," von Sanden said.

"[There are a] few reasons for that; some reasons completely beyond our control. We can't control political uncertainty – in the world, and obviously in Australia as well.

"We couldn't control that there was a royal commission into the banking [sector] and certainly as a result of that there were weaknesses in the housing and real estate market...

"All of this has certainly resulted in much weaker consumer and business confidence. That hit us and our industry – and many other industries of course.

"This would actually have been enough, but it wasn't, because then we faced some challenges with diesel homologation, certification issues. As a result of that, [there were] big delays [shipping cars from Europe].

"Then nature hit us with these stupid animals called brown marmorated stink bugs – and all of a sudden ships were turned around and got lost for weeks, if not months.

"That caused certainly a lot of frustration with customers and certainly with us. And it also caused a lot of grief for our dealers. The dealers lost a lot of money because of that, and so did we.

"So it was a bit of a 'perfect storm' scenario."

Subsequently, von Sanden mentioned in an aside that when he explained to customers their vehicle's delivery was delayed by stink-bug infestation, "They thought it was a bad joke."

"Now, luckily, this is coming to an end, we think...

"We could immediately see after the federal election had finished some positive trends. It coincided then obviously with an interest-rate decrease and, obviously also, the northern hemisphere started to warm up, which means instead of hiding in vehicles, the stink bugs started to get out and mate and multiply for next year. So that problem has gone as well...

"Iron ore prices are pretty stable or are actually on the rise, so there are some very good signs from an economic point of view.

"What it did for us is very pleasing. The last two weeks – just got today's figures – we had the highest order intake since 2017. We took more than 900 units per week, and that is 50 per cent above the year-to-date average. So a massive increase..."

It's entirely possible that the result over the past two weeks reflects the stampede to buy new Benz models before the impact of drastically increased stamp duty in Victoria makes itself felt from July 1.

Afterwards, von Sanden told carsales that sales had remained buoyant for Benz in 2017, despite both BMW and Audi each experiencing a significant sales downturn. In 2017 Benz had newer product across the board, but Audi and BMW were at the mid point or even the end point of the life cycle for some models.

But in 2018 even Benz succumbed to the weaker economic conditions. The situation has worsened again in 2019, but von Sanden's news suggests the market is beginning to gain ground once again – for Mercedes-Benz at least.