Victorian sales slump drags new-car market to 18-year low

  • Thursday 1st January 1970

The second wave of the coronavirus has ground new-car sales to a halt in Victoria, but the brakes started being applied in July. 

New-car sales in Victoria slowed by a greater margin than any other state or territory in July 2020 – and with dealerships now closed for six weeks due to a second wave of the coronavirus, there are grave concerns about a market recovery and potential job losses.

While Victoria is at the start of a six-week lockdown, buyers had already started applying the brakes in July.

Official sales figures released this week by the Federal Chamber of Automotive Industries showed deliveries of new cars in Victoria slowed by 27.8 per cent in July 2020, compared to the same month last year.

As the second biggest market for new-car sales, Victoria’s slowdown held back the rest of the industry, which was down 12.8 per cent nationally to post the weakest July result in 18 years, since 2002.

By comparison, the biggest region for new-car sales, NSW, was down by 7.8 per cent, and the third-biggest market, Queensland, was down by 9.1 per cent compared to the same month last year.

The Australian Capital Territory was the only region to post sales growth (up 30.6 per cent), but the overall numbers are small and were skewed by the mass rollout of replacements for written-off vehicles following severe storms in Canberra in January.

South Australia (down 5.0 per cent), West Australia (down 1.0 per cent) and the Northern Territory (down 4.5 per cent) posted modest sales declines compared to the same month last year, largely due to demand for mining vehicles and a carryover of orders for vehicles sold in June.

The other market to suffer badly in July 2020 was Tasmania, where demand for new cars dropped by 22.6 per cent compared to the same month last year, largely due to a decline in rental vehicle deliveries, which account for a large portion of sales in the island state.

As reported earlier in the week, the car industry is divided about the time it will take for a market recovery. The Victorian lockdown will also impact transport and delivery of some new vehicles into other states.

The CEO of the Australian Automotive Dealers Association (AADA), James Voortman, told CarAdvice earlier in the week: “A lot of the July results reflect the carryover of sales from June which was buoyed by government stimulus packages. Dealers couldn’t deliver every car they sold in June so a lot of those appeared as a sale in July.”

Mr Voortman added: “The July sales result also doesn’t reflect the decrease in foot traffic in dealerships last month, so we are watching closely what happens in August and September before declaring a recovery. In fact we believe we are a long way from returning to pre-COVID-19 levels.”