VFACTS 2019: New vehicle sales slump to eight-year low

Australia’s new vehicle market fell to its lowest level in eight years in 2019, official VFACTS figures released today reveal.

The Federal Chamber of Automotive Industries says a total 1,062,867 vehicles were recorded as sold in Australia last year, a dip of 7.8 per cent from the previous year and the lowest reported figure since 2011, when 1.008 million vehicles were sold.

The Toyota HiLux emerged as Australia’s most popular new vehicle in 2019 with 47,649 sales. It led the Ford Ranger (40,960), Toyota Corolla (30,648), Hyundai i30 (28,378) and Mitsubishi Triton (25,819).

Toyota again took the double gong by securing top market share, with 205,766 sales netting it a commanding 19.4 per cent slice of the pie. It was followed by Mazda (9.2 per cent), Hyundai (8.1 per cent), Mitsubishi (7.8 per cent) and Ford (6.0 per cent).

On a monthly basis, 84,239 new vehicle sales were recorded for December 2019, a decrease of 3.8 per cent from December 2018.

In a year affected by an election, tightening bank lending criteria, slow wage growth, low consumer confidence, fluctuating currencies and extreme weather conditions including the drought, most manufacturers endured slowing sales – a contrast with the record-breaking boom between 2015 and 2018.

Peering closer, Alfa Romeo (-30 per cent), Audi (-19 per cent), Holden (-28.9 per cent), Jaguar (-15 per cent) and Jeep (-25 per cent) were among the worst performers despite the introduction of new models.

FCAI chief Tony Weber described the trading conditions as “tough” while Volkswagen Australia chief Michael Bartsch predicted the stagnant sales to continue for the foreseeable future and for unavoidable price rises.

“On one hand the house prices are starting to recover again and we always know that vehicle sales are linked to the housing price index,” he said.

“That’s a really good sign. The banks will start getting tired of the over-restrictive world they’ve created for themselves with the credit squeeze. They will find where that pendulum should have swung. I’m fairly confident it will find its way back to where it should be. On that side I’m reasonably optimistic.

“But when you look at the other side, looking at productivity, real wages growth and household debt, you get concerned. Then when you look at the Australian dollar, the way it is now it’s inevitable there has to be price increases across the board."

There were some green shoots to emerge from 2019, however. In the luxury market, BMW (+1.1 per cent), Lexus (+9 per cent) and Volvo (+16 per cent) all defied market trends, while elsewhere, RAM (+296 per cent), Kia (+4.6 per cent) and Skoda (+19.6 per cent) managed strong, consistent growth.

SUVs and utilities were again in vogue, figures show. The high-riding market now commands 45.5 per cent of sales (+2.5 per cent), while LCVs hold 21.2 per cent (+0.6 per cent).

In contrast, the passenger car market fell to 29.7 per cent (down 3.1 per cent).

While holding the largest share of market, sales of SUVs declined for full year 2019 by 2.4 per cent compared to 2018, sales of passenger vehicles declined by 16.5 per cent and sales of light commercial vehicles declined by 5.2 per cent.

The 2019 figures come as the industry establishes more accurate reporting guidelines first detailed by carsales.com.au last month.

The Australia Automotive Dealer Association welcomed the changes while calling on regulators to penalise offending manufacturers.

“The practice of reporting false new car sales figures has been highlighted recently in the United States and it is a practice that has been endemic in Australia for some time,” said AADA chief executive James Voortman.

“It potentially leaves consumers vulnerable regarding the start time of their warranty; it misleads investors by overstating the health of the Australian automotive industry; and it puts the squeeze on dealers who are currently experiencing some of the most challenging market conditions in decades.

“It is high time that ASIC follows the lead of regulators in the United States, and comes down hard on those manufacturers which push fake sales numbers and in doing so artificially inflate their reported market share."

Source: VFACTS, Federal Chamber of Automotive Industries