Market Insight: State by state through a year of COVID

APRIL of 2020 was the low point for Australia’s automobile retail sector during a pandemic that blanketed the world and blacked out any chance of any accurate future planning.

 

Sales of new vehicles in most states in April plummeted by more than half compared with the March results. Buyers stayed at home – they had to – and the country switched to idle.

 

In the 13 months since March heralded the beginning of lockdowns and social distancing, there are some surprises in how the states and territories have fared.

 

The Australian Capital Territory, for example, posted sales in April this year of exactly the same number as April 2020. Yet NSW and Victoria have almost tripled their April 2020 results while most others have doubled.

 

The graph line shows the transition from a market weakened after three years of declining new-car sales to the collapse from these lows to an unprecedented plunge with April more than halving the sales of March.

 

It started a revival in May, and then strengthened in June on the back of some increased optimism in the community and more particularly, the federal government’s instant tax write-off of commercial goods that included vehicles.

 

But that wasn’t just a brief rebound. Buyers had been seeking a form of isolation when commuting and new and used cars became a premium, sparking new-car delays and rising prices across the board.

 

Rising prices – some late-model used vehicles suddenly adding tens of thousands of dollars to the equivalent new-car price – didn’t hold back the buyers.

 

The new-car market kept strengthening in most states from June, with November and December being the highlight of the year due to sales eclipsing the pre-COVID March 2020 numbers in all states and territories except the ACT (2959 units sold in March 2020 and 1528 sold in December 2020).

 

It’s also interesting to see the data from April 2020 to April this year. Given that April 2021 was the best April on record, it’s logical that there’s a list of positive results in each state.

 

The ACT has been the weakest performer – in fact, after April 2020 it is the only state to barely move its monthly sales and they remain a half of the territory’s result in March 2020.

 

The biggest winners are the remaining states and territories, with each boosting new-car sales by between 98.4 per cent (NT) and 157.6 per cent (Tasmania).

 

The figures were strong for NSW (up 143.9 per cent on April 2020); Victoria (up 142 per cent); Queensland (up 144.4 per cent); South Australia (up 134.7 per cent); and Western Australia which recorded a 139 per cent improvement.

 

The data shows that while the 2020 year was one of ups and downs with a stronger finish, sectors predicted to do well were still down on 2019.

 

The commercial sector was one that should mirror changes in the economy and specifically moves in vehicles allied to business, particularly vans and utes.

 

The ute category, with both 4x2 and 4x4 models, fell 11 per cent in 2020 despite the tax write-off incentive and growing demand during the latter part of the year.

 

In the first four months of this year, this ute sector was up a whopping 29 per cent on the same period in 2020, with a total of 71,708 utes sold to the end of April this year.

 

Vans sold at almost twice the rate in the period to the end of April 2021, with 9093 sales that compares with 5150 – or a drop of 43 per cent – in the same period of 2020.

 

Like utes, vans reflect business health. So for the current year at least, it appears the economy is carrying a lot of consumer confidence and, unexpected issues aside, augers well for the remainder of this year.