Why the post-election confidence boost has died
Recent sales figures show the supposed lift in consumer confidence was short-lived. Photo: Getty
Immediately after the election, there were allegations of a confidence boost being felt in the nation’s car yards.
That lift in confidence didn’t last long. It’s now officially dead.
Slipping by without much notice on Wednesday were the Federal Chamber of Automotive Industries’ (FCAI) sales figures for June. Despite the supposed confidence impact and first of the Reserve Bank’s interest rate cuts, new vehicle sales were down 9.6 per cent year on year.
New vehicle sales have been something of a leading indicator of consumer activity throughout the past financial year. The drop in sales started last July and kept going.
I’ve long been sceptical of putting too much faith in consumer confidence surveys. Looking at what consumers do is much more reliable than listening to what they say.
And what the consumer is continuing to do is rein in their spending. With consumption making up the better part of 60 per cent of the economy, that means growth remains weak.
June is the month vehicle manufacturers pull out all stops – all those EOFY sales pitched at bringing in the punters. As a sometimes observer of those sales, there were indeed some hefty reductions around – but they didn’t work.
Halfway through the calendar year, Australians have bought 554,466 new vehicles. This time last year and in 2017, the number was around 600,000. If the present decline holds, we could see fewer than one million new vehicles on the road this year.
Leading the way down are passenger vehicles – down 18.5 per cent on the previous June to 33,864. Australia’s love affair with SUVs continues with 53,509 units sold, but that was still down 4.7 per cent. Sales of light commercial vehicles fell 7 per cent to 26,372.
And continuing to fade like passenger cars is the Holden brand. In the first six months, 24,517 Holdens were sold – a 4.4 per cent market share putting it in 10th place. This time last year, it was still holding sixth.
Toyota remains the clear No.1 with 18.9 per cent market share, ahead of Mazda with 10 per cent, Hyundai on 8.1, Mitsubishi with 7.9 and Ford on 6.1.
