The 2020 Australian car sales rollercoaster

2020 has been a COVID fuelled rollercoaster ride for every industry, and in particular car sales in Australia

New car sales

2020 has been a COVID fuelled rollercoaster ride for every industry, and in particular car sales in Australia.

Last week the Federal Chamber of Automotive Industries (FCAI) revealed new car sales figures for July, which unfortunately showed that the highs reached in June appear to be a sugar-hit after restrictions eased.

Looking back at the new car sales for the year, sales unsurprisingly slumped in April and May as the reality of COVID sunk-in, businesses were forced to close and lockdowns ratcheted up.

Confidence started to return in May, with buyers researching from home and Carsales.com.au recorded their highest-ever month of traffic.

SummonSell to a Dealer(Less) Selling costs(Equals) youcash in hand$75,050$68,0005%$950$80,00010%-20%$7,050listing feeDealer costs& margin 1Your car is soldimmediatelycommissionYou saveVS20,00040,00060,00080,000Jan 2020Feb 2020Apr 2020Jun 2020Aug 20202020 AustralianNew car sales(passenger cars& SUVs only)JULYLockdowns start in VICVIC Stage 4 (late July)MARCHLuxury vehicle sales fall 2% APRILSales of new cars hit 11-year lowsMAYCarsales.com.au highest traffic everJUNEBMW reach all-time sales recordJULYVic and Tas new carsales slump 28% & 23%12 MARCHPandemic announcedGrand Prix cancelledMID MAYRestrictions easedMar 2020May 2020Jul 2020JUNEInstant Asset write-off extendedEnd of Financial Year sales

And when we were allowed, blinking, back into the sunlight in June, people sprinted to the dealerships. Some luxury car brands like BMW recorded all-time recordmonthly new car sales. This was buoyed by End of Financial Year sales, and the extension of the Instant Asset Write-off which applies to cars up to $150,000.

However, in July the figures fell back to earth with less new cars sold than either March or April, and August is predicted to be worse as Victoria (which contributes about 28% of new car sales) reached Stage 4 of lockdown and car dealerships and wholesalers are forced to close.

The fall in new car sales is also due to stock shortages; with COVID causing delays in production of cars (due to production line closures), and transportation of cars to Australia.

Hopefully the greater restrictions have a big impact on the spread of COVID-19, and allow for businesses to reopen, and Aussies to go car shopping again, which could lead to another bounce in September. Hopefully the supply chain constraints have also eased, and there are enough cars on our shores for people to buy. What is certain is that the rollercoaster ride has some way to go yet, so hold on tight.

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