Coronavirus carnage as Australian new-car market records biggest ever drop in April

The Australian new-car market was hammered in April, recording its biggest ever monthly fall as shoppers stayed home in the face of the coronavirus pandemic. 

Just 38,926 new vehicles found homes in April, down almost 50 per cent on the 75,550 sales recorded in April 2019 – earning the past month the unwanted honour of being the largest monthly fall since VFACTs figures were first recorded in 1991.

The annual tally isn’t fairing much better, with 272,287 new cars sold in 2020, down more than 20 per cent from the 344,088 sold to this time last year. 

April 2020 might be the biggest monthly drop, but it also marks the 25th consecutive month of falling sales for Australia’s struggling new-car market.

But there is some hope on the horizon, with the FCAI reporting an anecdotal lift in in consumer confidence as Australia’s lockdown policies begin to ease. 

“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,” says Federal Chamber of Automotive Industries (FCAI) chief executive, Tony Weber.

“Figures recently released by the Australian Bureau of Statistics show that 31 per cent of Australian citizens have experienced a decrease in income due to the pandemic,” Mr Weber said.

“In addition, 72 per cent 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.”

While all brands suffered drops in April, Toyota still leads the sales charge, shifting 10,325 units in April (down 31.8 per cent on the same month last year). Next was Mazda, with 3022 sales (down 60.5 per cent), then Kia with 2492 sales (down 44.9 per cent). Hyundai (2247 sales) and Mitsubishi (1734 sales) rounded out the top five.

According to the FCAI, the broader automotive industry will need government assistance to survive in the short term, with Mr Webber calling for Australia’s car industry – which employs more than 65,000 people – to be included in future relief plans. 

“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,” he said.

“The JobKeeper and JobSeeker payment programs 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.

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