Covid-19’s devastating effect on car sales
New cars sales plummeted in April as consumers stayed away from dealerships in droves.
The official Federal Chamber of Automotive Industries (FCAI) figures show only 38,926 vehicles were sold in the past month - a decline of 48.5 per cent compared to April 2019.
The dire result was the largest single decrease of any month since VFACTs sales figures were first compiled in 1991. It follows on from the 17 per cent fall experienced in March.
The head of the FCAI, Tony Weber, said the decline was directly linked to the slowdown in the economy caused by the Covid-19 pandemic.
"Clearly, the COVID-19 pandemic has had a major influence on the April sales result, and reflects a downturn in the broader economy right across the country," said Mr Weber.
"Figures recently released by the Australian Bureau of Statistics show that 31 per cent of Australian citizens have experienced a decrease in income due to the pandemic.
"In addition 72 per cent of Australian businesses reported that reduced cash flow is expected to have an adverse impact on business over the next two months.
"These conditions inevitably impact consumer confidence and purchase decisions," he said.
The head of the Australian Automotive Dealer Association James Voortman echoed those sentiments.
"Although we were expecting a very poor month, the extent of this decline in sales is still alarming," said Mr Voortman.
"The COVID-19 related restrictions and associated economic anxiety have combined to send the sales of new vehicles off a cliff.
"The effect of these figures on the wider economy should not be underestimated. Passenger cars is Australia's third biggest import; the industry contributes almost $13 billion to the economy," he said.
The new car market had been in decline for the past two years. April represents the 25 month in a row of negative growth.
Mr Weber has pleaded with both the state and federal governments to do more to help the auto industry, which he said employs more than 65,000 in Australia, to bounce back.
"Initially, we would ask that the instant asset write off package is extended to further stimulate business purchasing," Mr Weber said.
"We have begun to see a slight lift in consumer confidence as the COVID-19 restrictions start to ease. We really need further measures to support this confidence and continue the positive trend."
The worst hit segments were passenger cars and SUVs, which are usually dominated by private buyers, down about 62 per cent and 46 per cent respectively.
Utes fared a little better to be down by about 40 per cent.
But the downturn was offset in part by a relatively strong performance from Toyota, which is Australia's highest selling brand by a huge margin. It accounted for more than one in four sales during April.
The top 10 sellers list was dominated by Toyota as well as by utes and vehicles used in less affected industries such as agriculture and mining.
The Toyota RAV4 SUV was the second best selling vehicle in April knocking the Ford Ranger off its long held second place perch.
The RAV4 sales benefited from a long waiting list, especially the hybrid model which stretches back several months.
Toyota's main competitors didn't fare too well, Mazda was down 60.5 per cent and Hyundai sales fell 65 per cent.
BMW comparatively was the best performing brand in the country. The luxury brand sold 1703 vehicles in the past month, which is a fall of about six per cent compared to April, 2019.
Not much can be read into the April sales figures as all makers try to tread water until the economy reboots post Covid-19 lockdown.
Dealerships have remained open during the lockdown, with the brands putting in extra measures to insure the safety of customers and workers.
Top 10 sellers in April
Toyota HiLux - 2339
Toyota RAV4 - 1911
Toyota LandCruiser - 1603
Ford Ranger - 1540
Toyota Corolla - 1195
Toyota Prado - 947
Kia Cerato - 860
Holden Colorado - 854
Isuzu D-Max - 760
Hyundai i30 - 695
Top 10 brands in April
Toyota - 10,325
Mazda - 3022
Kia - 2492
Ford - 2251
Hyundai - 2247
Mitsubishi - 1734
BMW - 1703
Holden - 1501
Nissan - 1468
Volkswagen - 1328
Originally published as Covid-19's devastating effect on car sales