After a seemingly unending dive in new car sales for months on end, June 2020 car sales was a welcome surprise as 110,234 new units drove to their new homes before the month ended. The slump has now reached its 27th month in a row, taking the steepest plunge in April 2020 at -48.5%. While the year-on-year comparison still shows negative growth for June 2020, the decline this month is not at all sharp at -6.4%.
Recovery was forecast last May when the new car market posted a -35.3% sales performance, though still negative, the decline was slower. We were disbelieving hopefuls then, but these numbers for June do make us feel like it’s now safe to be optimistic about the car industry in Australia again.
What Factors Drove the Sales in June?
With this strong June 2020 sales performance, is the new-car market on the road to recovery finally? As optimistic as we would like to be, it’s quite early to tell, although the signs are good. We also recognise a play of some factors that brought it about. Let’s see what could have influenced sales.
- The expansion and extension of the Federal Government's IAWO of $150,000 per asset have encouraged businesses and tradies to invest in working utes and vans. This is evident in the phenomenal sales of 6,537 Toyota HiLux utes and an overall 8.6% increase in the sales for utes and vans.
- The government’s stimulus package has also helped to boost consumer confidence somehow and fuelled this bounce in performance.
- June is typically one of the strongest months in any year, thanks to attractive EOFY sales, and 2020 is no exemption. Even a pandemic could not dampen the lure of EOFY deals, with sales surpassing already-optimistic projections.
- Australia, as with most nations, was emerging from a lockdown around that time. People who have planned to buy a car earlier were unable to do so due to the restrictions. This could have reduced the sales for April and May and artificially increased the new vehicles sold in June.
- With the emphasis on social distancing, people who used to travel by public transport would now consider it essential to buy their own car as they return to work, possibly contributing to the number of June buyers.
Top Brand & Model Performers
Passenger cars saw a decline of 26.1%, showing how buyers now prefer utes and vans. Cars bought by personal buyers reduced by 7.9%, while purchase by business fleets increased by 6.3%. This is another indication of the boost that the industry is receiving from the government’s IAWO scheme.
The Toyota brand does it again
No other brand came close to Toyota, once again the bestselling brand with 22,867 cars sold, up by 8,000+ from last month.
A distant 2nd and 3rd were Mazda and Hyundai, respectively. The former sold 9,420 units, while the latter came away with 7,727.
The rest of the top 10 brands were: Ford (7,624), Mitsubishi (7,419), Volkswagen (5,737), Kia (5,727), Mercedes-Benz (4,437), Nissan (4,260), and Subaru (3,775).
Toyota HiLux leads the pack
Toyota HiLux utes comprised 6,537 of the total Toyota vehicles delivered to new owners, making it the top-rank model for the nth month – we’ve lost count! Unlike in April when Toyota hogged four positions in the top 5 chart, May and June only retained three Toyotas; Ford Ranger placed second with 5,329 and Toyota Corolla third with 3,008 cars sold.
The following models completed the top 10 list: Mitsubishi Triton (2,721), Toyota RAV4 (2,632), Mazda CX-5 (2,530), Toyota Prado (2,374), Hyundai i30 (2,368), Hyundai Tucson (2,206), and Kia Cerato (2,016).
Not Out of the Woods Yet
This uptick in sales is an incredible improvement in the industry’s long, dark tunnel. Have we reached the end of it yet? While sales have improved significantly from that 48.7% freefall back in April, it’s really too early to tell. As FCAI chief executive Tony Weber said, a lot more needs to be done, and the automotive industry is "not out of the woods yet." Let's see how things fare in July – check us out again, the same website next month.
By Jeannette Salanga (JMSL)