It’s official: 2018 was the first slowdown after three years of record new car sales
New-car buyers hit the brakes for the first time in four years in 2018 as falling housing prices, rising living costs, and tighter finance regulations put a dent in sales.
According to official figures from the Federal Chamber of Automotive Industries released today, the 2018 tally of 1,153,111 was down 3.0 per cent compared to the record 1,189,116 set in 2017.
December’s tally of 87,528 was the 10th month in a row in decline and the biggest monthly drop for the year – down by 14.9 per cent for the same month in 2017. It was also the weakest December since the start of the Global Financial Crisis in 2008.
“New vehicle sales results in 2018 reflect a challenging climate across the Australian economy including a slowing housing market, tightening of money lending and the drought,” said Federal Chamber of Automotive Industries (FCAI) Chief Executive, Tony Weber.
The 2018 decline follows three record years in a row – and also a sign car companies are starting to tighten sales reporting methods.
Contrary to widespread belief, new-car sales data is not based on actual registrations. Figures are “self-reported” by dealers and car companies. While cars cannot be counted twice, they can be counted months and sometimes years before they are sold to a paying customer.
The car industry has vowed to improve its reporting practices given the monthly sales data is used by organisations such as the Australian Bureau of Statistics and CommSec as an economic indicator.
Instead, in recent years the FCAI figures have become a barometer of how many new cars dealerships are prepared to put on their books.
The true number of new cars sold to paying customers from month to month typically ranges from 6 to 25 per cent less than what the brands report, according to internal industry estimates.
Toyota was market leader for the 16th year in a row after posting its fourth increase year-on-year at a time when the overall car market has dipped.
Toyota Australia spokesman Brodie Bott said car industry sales figures “provide a strong pointer to the economic year ahead” and the market was still relatively healthy as it was the 11th time it had eclipsed 1 million sales.
Passenger cars accounted for less than one third of total sales as utes and SUVs continued to grow, Mr Weber said, adding that “in real terms cars have never been more affordable … however there is more caution among buyers”.