Car sales at least starting to look better

NEW car sales figures are about to start sounding a lot better. We might even start to see the words “grew” and “increased” in market reports.

How can this be? Is there some form of new K. Rudd stimulus that will cause crowds to surge towards new car dealerships? No.

The market seems to be steadying, but the real reason sales will start to look stronger because we are getting close to a year from when the financial crisis really hit hard.

Car sales are usually reported either as year-to-date or monthly numbers.

The monthly results are compared with the monthly result of the preceding year, which usually gives the most accurate comparison, without seasonal differences.

Until now, the monthly comparisons have been rather ugly because the year-on-year sales comparisons have been against the still-rosy period of last year, before the global financial meltdown smashed into the new car market from August 2008.

So, while the year-do-date figures are still fairly sobering, the monthly figures are starting to look a whole lot better against the sliding market of last year.



For example, VFACTS figures show 78,131 cars were sold across Australia in September, which is down just 3.5 per cent on September 2008.

That doesn’t sound so bad, but the September 2008 result of 80,938 was also 3.1 per cent down on September 2007, when 83,489 cars were sold.

New car sales for November 2008 were down a whopping 22.2 per cent on November 2007. It hard to see that sales will take a similar hit this November, so there is a real chance for some relative growth.

December 2008 was not so bad, but January 2009 was 18.5 per cent worse than January 2008, February was down 21.9 per cent, March was down by 17.1 per cent and April was 23.9 per cent down.

No one is expecting the market to spring back in an instant, but the relative numbers should be better during all those months.

Some segments are starting to grow already. In September, the SUV segment inched up by 1.7 per cent compared to September 2008. It is the first time the SUV segment has grown this year, with year-to-date sales running 12.2 per cent down.

So how did SUVs fare in September 2008? Sales were down 10.5 per cent on the preceding September. Until then SUV sales had been up by five per cent (year-to-date) compared with the same period in 2007.

Even when compared to the low base of September 2008, one class within the SUV segment has still gone backwards dramatically.

The large SUV class, which is made up of the Jeep Commander, Nissan Patrol and Toyota LandCruiser was 8.6 per cent down on September 2008. This might have something to do with changing buyer tastes and also because September 2008 sales of large SUVs were up by 48 per cent on the previous September, so the relative base was higher.

Even so, year-to-date numbers show the large SUV class is in a bit of strife in 2009, down 37.9 per cent after nine months.

For the same period, compact SUVs are down just 8.4 per cent, medium SUVs are down 13.3 per cent and luxury SUVs are looking good with a year-to-date decline of just 4.1 per cent.

Compact and luxury SUVs have been performing better than the industry, which is down 13.1 per cent so far this year.

Given that sales in these classes dropped during the last three months of last year, 12 month 2009 results might even be better.

Now there’s an excuse to open some champagne.