AUSTRALIA: FBT change slows car sales

By Graeme Roberts | 4 September 2013

The Australian automotive industry took a hit in August with sales down 0.2% compared to August last year. Only 93,336 vehicles were sold.

Prior to the Government's 16 July fringe benefit tax (FBT) change, vehicle sales had increased, on average, by around 4.8% each month, compared to the same periods from 2012. The Federal Chamber of Automotive Industries (FCAI) expected last month’s sales to be around 98,000 based on year to date trends, without the negative impact of the FBT change.

Releasing the August 2013 VFACTS data, FCAI chief executive Tony Weber said the disappointing sales figures show the impact the FBT change is having on the range of car brands in the Australian market. 

"Unfortunately, but not unexpectedly, the FBT change is impacting on sales data. This indicates consumers are having to stall or forgo their purchases of new vehicles," Weber said.

“Without the return of the statutory formula method for salary sacrificed and employer provided cars, the FCAI and its members expect sales will continue to decrease through the rest of the year and into 2014, as the full impact on fleet sales works its way through the system.”

Business purchases are down 10% compared to August 2012 with purchase of light commercials, in particular, down 23.4%.

Government purchase of light commercials also fell 7.8%, contributing to a total light commercial market drop of 15.3% compared to the same period last year.

Government purchases of passenger vehicles and SUVs were low again, dropping 15.7 and 25.7% respectively compared to August last year. Just 1,664 passenger vehicles and 676 SUVs were bought.

The Mazda 3 was the top selling vehicle last month with 4,188 sold. The Toyota Corolla, came in second (3,681), the Toyota Hilux (2,884) followed in third, the Holden Commodore (2,809) came fourth and the Hyundai I30 was fifth (2,552).

July's top five selling brands held their position last month. Toyota held the top sales position in the August market with 17,758 vehicle sales, ahead of Holden (10,606), Mazda (9,825), Hyundai (7,808) and Ford (6,222).

Toyota Australia's executive director sales and marketing Tony Cramb said the strong August sales result for his brands masked an underlying reduction in new orders from key customers, particularly fleets.

"There was further evidence in August of customers putting orders on ice ahead of the federal elections, due to the cloud over the potential FBT arrangements," Cramb said.

"At the same time - with eight months of sales already in the bank - the industry is headed for a strong result in excess of 1m sales this year."