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Australian Auto Sales Slipped Fifth Time in a Row
Jan 29, 2009

November 2008 was the fifth month in a row when auto sales fell in Australia as the global recession led to a decline in consumer demand.

According to the Australian Bureau of Statistics, new motor vehicle sales in Australia declined 5.2% in November 2008 for the fifth consecutive month since July 2008, as reported by Reuters

Declining from 79,778 Units in October 2008, vehicle sales recorded a seasonally-adjusted 75,592 Units in November 2008. This is the worst result posted by the vehicle sales since April 2003. Also, in November 2008, sales slumped sharply by 17.8% on YOY basis. Vehicle sales slid 1.8% over October 2008 in terms of trend.

Moreover, in November 2008, new motor vehicle sales in Western Australia tumbled by 21% on YOY basis. During the 11-month period ending November 2008, total 108,236 vehicles were sold that is 2.9% below the figure recorded during the same period in the previous year.

Decline in the vehicle sales has been induced by declining wealth of the Australian households that led to the decline in consumer demand. As people all over the world are feeling the heat of financial crunch, Australian consumers are too finding it hard to purchase new vehicles. In fact, two leading financers to car dealers are making their way out of the country. Thus, to fill this gap, the government is providing assistance for bank lending.

Meanwhile, decline in the value of Australian dollar has made the imported vehicles comparatively expensive, thereby making them less affordable for the Australian consumers. Further, gloomy business environment due to the worldwide economic crisis and increasing unemployment are the other factors that are keeping the buyers away from the market.

The prospects for vehicle sales in Australia are expected to remain grim in 2009 also as the economic environment will empower the potential auto buyers to negotiate on the price. Particularly during the first half of 2009 auto sales are expected to witness unfavorable results due to the combined effect of global recession, declining commodity cost and setback in the short-term business expenditure plans.

According to a Research Analyst at
RNCOS, “The current auto industry scenario in Australia is indicating towards an uncertain future for the country’s economy. In view of credit crisis and strong Australian dollar, the automobile market is looking gloomy for the industry players.”

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