The Federal Chamber of Automotive Industries (FCAI) has released its new car sales report for September, which reveals that sales have fallen for the 30th consecutive month when measured in annual terms, and are now tracking below the Global Financial Crisis (GFC) low:
There were 896,324 new cars sold in Australia in the year to September 2020, down 17.3% from the same period in 2019 and down 25.4% from the March 2018 peak (1,201,309).
The last time new car sales were this low was in October 2003 when Australia’s population was around 6 million (30%) smaller.
It was also the weakest September sales figures in 18 years.
Australia’s car dealerships are now concerned that the recovery could take longer than expected. Accordingly, they support the announced easing of lending restriction:
The Australian Automotive Dealers Association (AADA), which represents 50,000 employees and more than 3500 showrooms across the nation, says the September figures showed the recovery could take longer than expected.
“Victoria continues to drag down the rest of the country however I think the economic realities of the pandemic are starting to set in and it’s uncertain how long our industry will take to recover,” said the CEO of the AADA James Voortman.
“Although there’s a lot of economic certainty at this time, we are hopeful that the relaxation on lending regulations announced last week will flow through and give consumers confidence to borrow money to purchase a car.”
There’s no sugar coating this data. It is disastrous.
The economics of car dealerships is not exactly robust, with many dependent on high turnover and margins of less than 1%.
Thus, brace for massive consolidation as many car dealers go bust.
