Medium-rare

DEMAND for medium SUVs, a cornerstone of last year’s all-time record million-plus vehicle market, could contract in 2008 because of the pressure of interest rates.

Research by Roy Morgan Research shows that buyers of vehicles like the Ford Territory, Toyota Prado, Holden Captiva, Toyota Kluger and Mitsubishi Pajero are far more worried about recent interest rate rises than buyers of other types of vehicles.

The medium SUV market rose 21 per cent last year compared with an overall market increase of nine per cent. But, by September 2007, which was before the latest round of rate rises, 58 per cent of buyers in this key segment were telling Morgan’s pollsters that they are “worried about interest rates”. This is up from 25 per cent in September 2003 and 44 per cent in 2006.

The rise is well above the average response for all new-car intenders. Of all those who intend to buy a car in the next four years, interest rates were a worry for 44 per cent in September 2007 – up from just over 35 per cent in 2006.

Sak Ryopponen, a consultant with Roy Morgan Research, said medium SUV intenders have more mortgages and more children under 16 years than buyers in other market segments.

“Fifty per cent of medium SUV intenders have home mortgages compared to 27 per cent across all new vehicle intenders, and 51 per cent live in households with children under 16 compared to 33 per cent across all new vehicle intenders,” he said.

Mr Ryopponen said Roy Morgan Research was continuing to monitor the interest rate data and its potential impact on new-vehicle sales.