A proposed increase in Australia’s luxury-car tax is to blame for a 2.7% decline in new-vehicle sales to 83,976 units in July.

The new Labor government is in the process of raising the levy on cars costing more than A$57,123 ($52,351) to 33% from 25%. The legislation, now tied up in Senate hearings, is to be backdated to July 1.

The July result was only the second time in the last 19 months the Australian market has not seen a year-on-year sales increase.

“The proposed tax hike has had a devastating impact on new-car sales,” Federal Chamber of Automotive Industries CEO Andrew McKellar says. “It is clear the downturn has been exacerbated by the impact of this unfair tax hike, and the industry has significant concerns that orders will continue to be affected in coming months.

“If this situation continues, the government will not receive the additional revenue it had projected and there is a real risk that it will cost jobs. In these circumstances, one would have to question why the government would pursue this tax increase.”

Among luxury vehicles that saw June-to-July declines were the BMW 3-Series (49% to 340 units); Mercedes S-Class (68.6% to 16); Saab 9-3 Convertible (66.6% to 18); Porsche Cayman (68.4% to six); Nissan Patrol (41.2% to 256) Toyota LandCruiser (37.1% to 712) and Range Rover Sport (64.9% to 66).

Sales of medium SUVs fell to 5,869 units in July from 7,563 in June, while large SUVs dropped to 984 from 1,603.

Despite the July sales result, the overall market is up 2.6% year-to-date, driven by growth in the light-car (1.0%), medium-SUV (8.1%) and large-SUV (7.4%) segments. Light-commercial-vehicle deliveries through July increased 6.3% from like-2007.

After seven months, small-car sales were up 3.5% and large cars were down 15.3%.

Toyota Motor Corp. Australia Ltd. remained the top-selling auto maker in July with a record 20,521 units for a 24.4% share of the market, followed by GM Holden Ltd. with 11,148 and 13.3% and Ford Motor Co. of Australia Ltd. with 9,464 for 11.3%.

Toyota is the year-to-date leader as well with 147,961 deliveries, followed by GM Holden (78,271) and Ford (63,933).

With Toyota’s July sales up 7.7% from year-ago, it was the first time any auto maker has topped 20,000 units in the month. The Yaris, Camry, Prado, LandCruiser, HiLux and HiAce were best sellers in their respective segments both in July and year-to-date.

Mitsubishi Motors Australia Ltd. sold 4,277 units in July, down slightly vs. year-ago due to what the auto maker says is limited availability of some popular product lines. Through July, Mitsubishi Australia deliveries climbed 11.5% to 36,239 units, boosted by sales of the 2-wheel-drive Triton utility, which skyrocketed 81.9% to 4,576.

Mazda Australia Pty. Ltd. set a sales record in July with 6,508 units, driven by a 147.0% jump in Mazda 2 deliveries to a record 1,447. The auto maker’s year-to-date sales rose 7.5% to 49,001 units.

Meanwhile, in New Zealand, July saw the biggest drop in new-vehicle sales since the 1990s, with new-car and commercial-vehicle deliveries falling 15.7% to 11,811 units.

July new-car sales of 5,429 units were down 14.9% from prior-year’s 6,382, while commercial vehicles slumped 17.5% to 2,059.

“There were signs of a slowdown in new-vehicle sales in May, then June bounced back strongly, followed by a July which has reflected most of the recent negative economic data,” Motor Industry Assn. CEO Perry Kerr says.

Year-to-date, new-car sales of 43,442 units were at virtually the same level as like-2007, while commercial-vehicle deliveries were up 4.3% to 15,312.

With new-vehicle sales of 11,720 units through July, Toyota New Zealand Ltd. continues to extend its lead over Ford Motor Co. of New Zealand Ltd. (6,669) and Holden New Zealand Ltd. (5,994).