Oz New-Vehicle Market Continues Torrid Pace

Australian benchmarks fell like dominos as new-vehicle dealers produced the biggest month of sales ever in June, steering the industry toward yet another record year after its best-ever first half.

Deliveries rose 2.2% from like-2015’s strong June results to reach 128,569 units, pushing the first six months’ total up 3.4% to 598,140.

The month had the same number of selling days as year-ago, which meant dealers sold an additional 105 vehicles a day. The result was up 33.0% from May.

Federal Chamber of Automotive Industries CEO Tony Weber says the outstanding June result scotched any suggestion the federal election campaign – resulting in a hung parliament and the prospect of minority government – would have a dampening effect on consumer activity.

Instead, buyers responded vigorously to the value that was on offer, along with record-low interest rates in the final month of the fiscal year, he says.

“The end of the financial year historically is always very busy for the industry, but this was an exceptional month,” Weber says in a statement.

“Without any doubt this proves that competition is fierce, this is providing an important stimulative effect on our economy and the current market environment is at its healthiest in decades by delivering affordable vehicles that are attractive to customers.”

SUVs again were the dominant force in the market, with June sales up 8.9% year-on-year to 46,011 units. Small SUVs were the strongest performers in the segment, up 18.2% to 13,025 units.

Car sales fell 4.5% to 53,832, while light commercials climbed 5.9% to 25,157 units.

CV sales to businesses rose 16.4%, while SUV deliveries to that market jumped 18.7%. Weber says there also was a significant 37.6% increase in the sale of diesel SUVs to non-private buyers.

While the June car market edged lower, sales of locally manufactured cars rose 189 units to 9,857.

First-half car sales slipped 5.2% to 247,149, but this was more than offset by SUV sales rising 11.4% to 222,393 and LCV deliveries jumping 9.9% to 112,883.

Toyota sold 22,083 vehicles in June, up 2.7% year-on-year for a dominant 17.2% market share. Mazda came in with 12,455 units (9.7%), ahead of Hyundai with 12,300 (9.6%), GM Holden at 11,376 (8.8%) and Mitsubishi with 8,726 (6.8%).

The top five best-sellers were the Hyundai i30, with a notable 6,432 units, followed by the Toyota Hilux (4,613), Toyota Corolla (4,427), Mazda3 (4,112) and Ford Ranger (4,078).

The Corolla retained its title as Australia's best-selling car in the fiscal year ended June 30 with 40,800 deliveries.

For January-June, Toyota sold 102,344 units and led seven market segments with the HiLux 4x2 and 4x4; Camry; LandCruiser Prado and 200 Series; and HiAce van and bus.

Sales and Marketing Executive Director Tony Cramb says Toyota is strongly positioned to achieve market leadership for the 14th year in a row and the 20th year overall.

“Across the industry, local buyers continue to show confidence with record sales in June and for the first half of the year – and even an 8-week election campaign has not dented buyer demand,” Cramb says in a statement.

Meantime, Toyota has passed on to buyers the full benefits of a higher luxury-car tax threshold. Its recommended retail prices have fallen A$284 ($212) for the entire LandCruiser 200 series range, four LandCruiser Prado variants, AWD Kluger Grande and Tarago Ultima V-6. The 2WD Kluger Grande now is priced below the threshold, resulting in a A$267 ($200) reduction.

Cramb renews calls for the abolition of the tax, saying it is an unfair impost on motorists and the automotive industry.

“This is an inequitable tax, because it applies only to vehicles and not to other high-end goods such as luxury boats, jewelry and watches,” he says. “Last year, more than 13,500 new Toyota owners were hit by this inefficient, punitive and poorly designed measure.”

The luxury-car tax threshold rose July 1 by A$948 ($709) to A$64,132 ($47,968) in line with inflation, while the rate for fuel-efficient cars achieving at least 33.6 mpg (7 L/100 km) rose for the first time in six years by A$151 ($113) to A$75,526 ($56,476).

Meantime, Mazda set a new fiscal-year benchmark and had its biggest quarter ever, after selling 12,455 units in June – its best month on record. With first-half calendar-year sales up 7.7% at 60,973 units, it was Mazda’s best half-year performance, thanks to a 30,524-unit record second quarter.

Strong sales of its key models gave Volkswagen Australia a good June as well. It sold 5,913 units and said its total would have been more but for lack of SUV inventory. The Golf was VW’s best-performer in June, delivering 2,363 units.

Hyundai’s i30 was Australia’s best-selling vehicle in the first half after four straight months on top, as its deliveries soared 44.7% year-on-year to 22,857. It helped push Hyundai’s first-half total up 8.5% to a record 54,350 units.

Mitsubishi Australia set a first-half LCV/SUV sales record with deliveries rising 13.7% to 31,954. Its 8,726 units in June, including a record 7,442 LCV and SUV sales, moved it up to fifth overall in the Australian market and gave it first-half sales of 37,265.

Kia Australia is enjoying what it calls extraordinary year-on-year growth. With June sales up 41% to a record 5,170 units, Kia posted first-half growth of 28% to 21,286 units.

Kia’s June sales were led by the newly upgraded Cerato, which notched a record 1,781 units, while the Sportage joined in with 1,203 units.

“While it has been an outstanding first half for Kia Motors Australia, we are under no illusions that such a competitive market will provide anything but a challenging second half of the year,” Kia Australia Chief Operating Officer Damien Meredith says in a statement.

Subaru also set a monthly sales record in June on its way to its best-ever first half, up 11.1% to 24,061 units.