VACC Senior Research Analyst, Steve Bletsos breaks down the latest new-vehicle registration numbers. Here’s what you need to know…
- New-car sales are a key indicator of economic performance, consumer spending and optimism, as well as being the second most significant purchase people make after housing.
- July was another strong month for new-car sales, with 84,161 new vehicles sold nationally. This is up 16.1 percent or 11,656 vehicles over July 2020, and up 1.2 percent, or 977 vehicles, over July 2019. Sales for August, however, may not be so promising with the full effect of the lockdown, particularly in NSW, coming into play.
- Year to date, dealers sold 651,629 new vehicles, up 26.5 percent or 136,709 more vehicles than YTD last year, and up 2.2 percent or 13,979 vehicles over YTD July 2019. So, this year’s sales are surpassing last year’s sales, and the market is slightly ahead of where it was in 2019. Going on current trends, the Australian market should surpass one million sales by the end of the year, but this position will still be well below the peak sales levels achieved in 2017 (1,189,082 vehicles).
- Victoria seems to lag the other states in terms of sales performance, however. While July 2021 was a strong month for Victoria, with a sales increase of 34.1 percent, or almost 6,000 vehicles over July last year, this is still 785 vehicles below July 2019. Also, year to date, 12,354 fewer vehicles were sold in Victoria compared to YTD July 2019. The Victorian market still has not fully recovered from the effects of last year’s COVID lockdowns and trading restrictions.
- Which segments grew in July? Light commercial vehicles grew by 40.9 percent and are now almost one-quarter of the new-vehicle market. SUV sales grew by 15 percent and are now more than half (51.3 percent) of the market. Heavy vehicle sales also grew by 21.7 percent in July. The passenger car segment continues to shrink, recording a sales drop of 3.0 percent and is now down to 21.3 percent of the market.
- Which brands were popular in July? Bentley sales are up 212.5 percent, Land Rover sales are up over 178 percent and BMW sales are up 79.4 percent. MG sales continue to grow, up 197 percent in July, and triple what they were in July last year. Haval (GMW) utes and ISUZU utes continue to grow strongly. Honda sales seem to be in a rapid decline however, falling over 62 percent in July this year compared to last year. Australians bought 2,199 Hondas nationally in July last year and only 899 in July this year. This could be Honda’s new fixed-price agency model at play here, where Honda’s car prices are non-negotiable. Honda’s share of the new vehicle market has now halved from 3.6 per cent this time last year to 1.8 percent today. That’s the biggest drop in market share of any brand. MG now surpass Honda, sitting at 3.5 percent market share. This may force the company to rethink its fixed-price car sales model.
- The demand for EVs and plug-in-hybrid electric vehicles continues to grow strongly, particularly in Victoria and NSW. In Victoria, 163 EVs sold in July this year, up from 56 last year. This does not include Tesla EV sales, as the US company does not report its sales figures. In NSW, 126 EVs sold in July this year compared to 35 in July last year. There is a $3000 EV subsidy for all new EVs sold from 1 July in Victoria, and a similar subsidy starts in NSW from 1 September this year. Unlike Victoria, NSW will not introduce a road user charge until 2027, so EV sales in NSW may take off after September this year.
- Diesel and petrol vehicle sales continue to grow, however, particularly diesel SUVs and light commercial vehicles. Diesel SUV sales are up 42.4 percent in July and diesel light commercial vehicles are up 46 percent. This is keeping the share of EVs in the overall market very low, and they’ll continue to be low if the number of diesel and petrol vehicles sold keeps growing.
- New car sales totalled 84,861 units in July 2021, the fewest in five months. But sales are up 16.1 percent on a year ago. New-car sales momentum has slowed because of lockdowns, supply bottlenecks, and delayed car deliveries to dealers. The worsening global chip shortage is continuing to disrupt motor vehicle production. Also, latest ABS data shows a reduction in loans for motor vehicles of 11.7 percent in June 2021.
- Consumer demand for new SUVs and utes continues to support car dealerships. SUVs jumped 14.9 percent and light and heavy commercial vehicles 37.8 percent higher, but passenger car sales in July were down 2.9 percent over the year. EV sales grew by 260 percent in NSW and 191.1 percent in Victoria. Low interest rates and the Federal Government’s instant asset write off scheme also support new-car sales.
- Sales across states – NSW (-1.7 percent), Victoria (+34.1 percent), Queensland (+26.1 percent), South Australia (+4.9 percent), Western Australia (+22.4 percent), Tasmania (+17.7 percent), Northern Territory (+39 percent), ACT (-11.2 percent)
- Utes continue to dominate sales in July, led by the Toyota Hilux (4,610), Ford Ranger (4,064) and ISUZU D-Max (2,535). The Toyota Corolla was the biggest selling passenger car (2,535).
- Leading auto retailer Eagers Automotive reported that for the six months to June 2021, it expects to record an underlying profit before tax of almost $219 million, up 442 percent on the period prior. Eagers shares are up almost 23 percent in 2021 year to date.
- ARB Corp, Australia’s largest manufacturer of four-wheel-drive parts and accessories reported an unaudited revenue of $623 million for the financial year 2021, up 40 percent, with profits before tax of around $150 million. ARB shares are up 55 percent so far in 2021.
Data source: Federal Chamber of Automotive Industries (FCAI).
Statistics as discussed on THE GRILLE, a new automotive industry podcast hosted by Greg Rust, Shane Jacobson and VACC CEO, Geoff Gwilym. Visit: thegrillepodcast.com.au