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May 5, 2020

Australian sales down almost 50% in April

New vehicle sales in Australia fell almost 50% year on year in April 2020 but the the Federal Chamber of Automotive Industries (FCAI) might draw some comfort the market didn't tank as much as here in the UK last month.

By Olly Wehring

New vehicle sales in Australia fell almost 50% year on year in April 2020 but the the Federal Chamber of Automotive Industries (FCAI) might draw some comfort the market didn't tank as much as here in the UK last month.

FCAI chief executive Tony Weber said: "A total of 38,926 sales were recorded for the month. This figure represents a fall of 48.5% over the same period last year (75,550 sales), and the largest single decrease of any month since VFACTs figures were first recorded in 1991. 

Year to date figures for April totalled 272,287 sales, down from 344,088 in 2019, a 20.9% decline.

"Clearly, the COVID-19 pandemic has had a major influence on the April sales result, and reflects a downturn in the broader economy right across the country," Weber said. 

"Figures recently released by the Australian Bureau of Statistics[1] show that 31% of Australian citizens have experienced a decrease in income due to the pandemic.

"In addition, 72% of Australian businesses reported that reduced cash flow is expected to have an adverse impact on business over the next two months.

"These conditions inevitably impact consumer confidence and purchase decisions."

The Australian new vehicle market haD been under stress for some time with April 2020 BEING the 25th consecutive month of declining sales year on year.

Environmental, economic and political factors, along with tight credit lending restrictions, have all contributed to this fall.

Weber said the automotive industry had focused on keeping dealerships open to ensure customers could access sales and important maintenance services for their vehicles despite the current health and economic difficulties.

"Our member brands are working closely with their dealer networks to ensure dealerships are accessible and safe.  Enhanced hygiene protocols and contactless sales and social interactions have been initiated to ensure personal protection for both customers and dealer staff."

Many automotive brands are also providing financial and sales target relief to stressed retail outlets.

"We know that our member brands are doing everything they can to assist both their dealerships and their valued customers during this difficult time.

"But more needs to be done. We are calling on federal and state governments to consider the automotive industry which employs over 65,000 people in Australia, when compiling their recovery plans," Weber said.

"The JobKeeper and JobSeeker payment programmes put in place by the federal government are a welcome initiative. 

"However, we believe the scope needs to ensure high turnover and low margin businesses, such as new car dealerships, are covered. 

"These businesses are often the backbone of local communities and in the current environment, many are facing overwhelming challenges.

"As well as continued business initiatives, support to bolster consumer confidence is imperative to the strength of our economy.

 "We have begun to see a slight lift in consumer confidence as the COVID-19 restrictions start to ease. We really need further measures to support this confidence and continue the positive trend.

"Initially, we would ask that the instant asset write off package is extended to further stimulate business purchasing," Weber said.

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