Amid what was always expected to be a tough month for new car sales, the industry was hit by an abrupt slow-down, however, there were a couple of positive notes that emanated from the results.
With the Coronavirus effectively changing our day to day lives, forcing more and more Australians to take shelter at home, car buying activity fell down the list of essential activities for many.
March is traditionally a strong month for new car sales, so on that front there was some underlying support, especially in light of the fact that a small but notable portion of dealerships elected to close their doors. Nonetheless, it sets the scene for a concerning outlook in the months ahead.
Total new car sales
New car sales dived 17.9% compared with March last year, resulting in a total of 81,690 sales. The last time we saw results that bad was in 2009, when just 75,650 cars were shifted out of showrooms. This marks the 24th successive month of declining new car sales.
As we reported last week, dealer leads have all but dried up, with new buyer interest dropping significantly as the month progressed. The month’s result brought year-to-date numbers to 233,361 sales, down 13.1% on the same period last year.
By region, sales slipped as much as 33.5%. Predictably, NSW, Victoria and Queensland led the slide, with their respective performances resulting in a collective reduction of 15,214 sales. On the contrary, the ACT posted a 77% increase in sales, with the region’s recent hail storm driving buying activity.
New car sales by segment
In terms of sales by segment, 39,171 units were Sports Utility Vehicles, which was in line with February’s result. Although this accounted for 48% of total market share, the comparable result with March 2019 was 14.2% lower. Passenger vehicle sales slumped 24.9% to 21,777 units, while light commercial vehicles dived 15.5% to 18,162 units. Heavy commercial vehicles were down by 21.7%, but represented a larger portion of the market.
Private buyer sales fell 12.5% to 40,323 units. As businesses also tightened their spending, the 23.1% drop in sales for that segment was all but expected, resulting in just 31,277 units snapped up. Rental car companies also took a big hit, down 26.3%, while government fleet sales fared only slightly better, down 8.5%.
Yet again hybrid vehicles gained ground, with their sales more than tripling to 4,649 units. The Toyota RAV4 is underpinning the result, proving to be a category-defining leader. Rounding things out with a look at the leading geographic source of vehicles, we witnessed Japan-sourced vehicle sales down 11.7% (27,100), Thailand down 21.6% (21,108), Korea down 12.1% (11,658), Germany down 41.1% (5,007), USA down 9.3% (2,990), and China up 48.2% (2,127). The jump in vehicles from China was a surprise point, although a squeeze on finances could have played a role in driving new car buyers towards value-oriented models from Chinese auto brands.
Stay tuned for Part 2 of our review into new car sales for March 2020, covering vehicle makes and models.