World Economic Slump Takes Toll on Oz, NZ Market in October

The Australian motor industry gets tied up in the global economic traffic jam, as sales dive 11.4% in October to 79,105 units.

The Federal Chamber of Automotive Industries attributes the sales drop to the broader slowdown in the Australian and world economies as well as reduced access to wholesale and consumer financing.

FCAI’s VFACTS data shows year-to-date new-vehicle sales down 0.9% to 864,037 units.

“These figures confirm the global financial crisis is having an impact on broader economic activity, including the new-vehicle market,” FCAI CEO Andrew McKellar says in a statement.

Consumer confidence is affecting demand, he says, but also notes the industry is keeping a close eye on how restricted wholesale financing for dealers may further impact the market.

“The industry is working systematically to find alternative solutions to this issue in an effort to avoid the risk of further disruption to the market,” McKellar says. “The most recent (0.75 percentage point) interest-rate cut was well justified and will hopefully go some way to rebuilding confidence in the marketplace.”

Meanwhile, members of the Australian Automobile Dealers Assn., the new-car division of the Victoria Automotive Chamber of Commerce, meet to discuss the financial crisis facing the industry as a result of GE Capital Finance Australasia Pty Ltd. and GMAC Financial Services LLC quitting the local car-loan market at the end of the year.

Hilux truck Australia’s top seller in October.

The association says this has left many car dealers, who rely on financing to purchase vehicles from auto makers, in a precarious financial situation.

VACC Executive Director David Purchase says the consensus of opinion is government will not be able to pour money into the auto industry to arrest the situation.

“Where we would like to see government become active is in relation to the deadlines imposed on the dealers,” he says in a statement. “Those who have been advised their funding will cease, have been given 60 days notice to find an alternative provider.

“In our opinion, this period of notice is too short and unreasonable. So we are calling on government and the finance providers to reconsider their timeframe and work with industry bodies and new-car dealers to provide a decent period of notice.”

In the meantime, the group is encouraging car dealers to seek alternative financing sources.

“They should consider cash flow, debt management, capital outgoings and, in general, maintain a tight rein on their business costs,” Purchase says.

The FCAI says light-commercial-vehicle sales were positive in October, with the segment recording a 7.9% increase to 15,686 units, taking the 10-month total 7.7% higher to 158,514.

All other segments recorded declines, with passenger vehicles down 13.8% to 45,978 units, SUVs off 19.1% to 14,357 and heavy-commercial vehicles falling 15.9% to 3,084.

Toyota Motor Corp. Australia Ltd. retained the top sales position in October with 18,075 vehicles and a 23.6% market share, followed by GM Holden Ltd. (10,171 units and a 12.9% share) and Ford Motor Co. Australia Ltd. (8,567 and 10.8%).

Year-to-date, Toyota has sold 202,511 units, outpacing GM Holden (109,771) and Ford (89,983).

GM Holden’s Commodore was the top-selling car in October with 3,810 units, ahead of the Toyota Corolla (3,497) and Ford Falcon (2,747).

But Toyota Australia’s Hilux truck was the month’s overall top-seller at 3,892 units.

“Toyota’s sales of commercial vehicles are up almost 18% this year to a record of more than 98,000,” David Buttner, senior executive director-sales and marketing, says in a statement.

“Industry-wide sales of light-commercial vehicles are also running at record levels – up around 4.5%,” he adds.

Mitsubishi Motors Australia Ltd. says despite a generally slowing automotive market, its October sales rose 7.5% to 4,442 units, taking its year to date total up 10.2% to 49,074.

“We have great products that have seen us excel in the growth areas of the Australian automotive market, and with some exciting new products, we are well positioned for further future success,” President and CEO Robert McEniry says.

Suzuki Australia Pty. Ltd. defied the economic downturn with record October sales of 2,042 units.

“This is a fantastic result for Suzuki, particularly given the tightening economic situation,” General Manager Tony Devers says. “Suzuki has clearly defied the market trend and is running well ahead of the overall industry.

“We have managed this result while competing in just 45% of available segments.”

Suzuki’s year-to-date sales are up 6.6% to 19,340, units, leaving the auto maker on track for its sixth successive record sales year.

Meantime, New Zealand’s October results reflect the effects of the global financial crisis, but not to the extent of overseas markets.

New-car sales fell 5% year-on-year to 7,477 units, but were up 12% from September. New commercial-vehicle sales dropped 13% from year-ago to 1,863, but were marginally up on September.

The Motor Industry Assn. says in a statement passenger- and commercial-vehicle sales fell back to about October 2005 levels, and the total new-vehicle market year-to-date now is down 2.6% from like-2007 to 83,962 units.

“It’s nevertheless a pretty good performance considering the economic headwinds,” MIA CEO Perry Kerr says. “What’s even more significant is the industry has finally put the used-import era behind it. In October, not only did the number of new passenger cars sold beat the equivalent used-import figure by 13%, but it was the first month since July 1994 that new-car registrations exceeded those of used imports.”

Toyota New Zealand Ltd. is in an unassailable position for the full year with year-to-date sales of 18,098 units, well clear of Ford (10,095) and Holden (8,195).