Car industry looks to interest rate cuts for relief
February 5, 2009 by Matt Brogan
The Australian car industry will look to interest rate cuts and the federal government’s stimulus package to revive its flagging fortunes.
With new car and truck sales down more than 18 per cent in January, the Federal Chamber of Automotive Industries (FCAI) said last night the impact of the global economic crisis was persisting.
Last month’s fall followed a drop of 11 per cent in December and 22 per cent in November last year.
“This is a not an unexpected result, given the broadening impact of the global financial crisis now being felt across the Australian economy,” FCAI chief executive Andrew McKellar said.
He said the automotive industry was hopeful this week’s interest rate cut and the new fiscal policy measures announced by the government would help underpin the market in coming months.
“This is an extremely competitive market with plenty of opportunities, and with interest rates now even lower people should not be deterred from considering buying a new vehicle,” McKellar said.
Businesses were also encouraged to take advantage of the government’s strengthened investment allowance, which was expected to apply to new vehicle purchases.
“It’s understood that many businesses will be able claim a deduction for up to 30 per cent of the cost of a new vehicle,” McKellar said. “That is an enormous saving and something that businesses should look at very closely.”
The FCAI on Wednesday said 67,079 new vehicles were retailed last month, a fall of 18.5 per cent compared with the same month in 2008. The fall in demand equated to 607 fewer vehicles being sold each day and mirrored dramatic falls in the United States.
In the US, new reports show the fall in vehicle sales there accelerated in January as tight credit and consumer pessimism drove sales to the lowest levels in decades.
Preliminary estimates from market research firm Autodata showed a 37 per cent drop in January sales from a year earlier to 656,976 vehicles which represented a seasonally adjusted annual rate of 9.57 million, the lowest since June 1982.
In Australia, Toyota was the top selling company last month with 13,427 vehicles ahead of Holden on 8762 and Mazda on 6532.
Print it: 
*****PRIMO!*****
Maybe if they REALLY wantED to stimulate sales what they could do is get the public interested and to inspect cars, ITS THE FIRST STEEP TO BUYING.
What about the FCAI making the MMShow *FREE* this year?
Cheers
F-0
PS/ I am going to Press-Only day with the C/A team
The reality is some people have more free money now than they ever did!, what with the interest rate drop there home repayments are a lot less, and fuel costs are down, plus the fact that car finance is now a lot cheaper too..
So i think for some people buying a new car now makes a lot of sense..
As long as the banks and other lenders pass on most of the (RBA) interest rate cuts for lending products (loans) such as Motor Finance and Personal Loans. Remember some people may want to burrow small amounts to buy a car as they may have some savings put away, therefore they’ll have no choice other than applying for a personal loan as most if not all lenders will not allow you to borrow less that $15K for Motor Finance. Personal Loan interest rates are still high compared to Motor Finance rates.
The interest rates for car loans are still too high. Most lenders are still offering around 10% or higher, and I dont see any signs that the lenders will be reducing their rates on car loans anytime soon. Lower rates means more ppl will get new cars, better for the industry dont you think.
sounds good in theory that sales will boost with lower interest rates, but since when did car loan rates ever drop when RBA rates did??
car loan rates dropping when RBA rates do is about as funny as LPG prices falling when oil prices drop
QUOTE…….
“It’s understood that many businesses will be able claim a deduction for up to 30 per cent of the cost of a new vehicle,”
Whats new?? all business purchases are currently 100% deductable.
I assume they mean you can claim 30% in the first year which.
The wording is incorrect as business purchases are currently 100% deductable anyway.
what it should read is that you can claim 2 years worth of depreciation straight up.
AndrewM the wording should be 30% depreciationin the first 12 months. Still won’t do anything for those on leases, but will work okay for those on Chatel Mortgages.
Want a really strange quirk from history though?? Previuosly when interest rates were low the car market slowed, when home rates went high, housing died but car sales increased. Source of that is only personal experience.
Frontman,
i already gathered what the 30% referred to, all it really means is that next years depreciation will come a year early.
they make it sound as though you can claim on something you never could before.
its pretty much letting you claim a bit more in advance in the way the letter i got from the ATO yesterday informs me i can defer 20% of my tax.
Ive still gotta pay it at the end of the day in the same way i still get to claim that “30%” at the end of the day.
they are just letting you hold onto their tax money for a bit longer, or giving you back your tax money earlier.
I gotta wonder if the incentive only applies to aussie made purchased vehicles……
I bloody hope the incentive doesnt apply to imported vehicles
Andrew M Says:
February 5th, 2009 at 9:36 pm
“I gotta wonder if the incentive only applies to aussie made purchased vehicles……
I bloody hope the incentive doesnt apply to imported vehicles”
Imported cars are in.
That X6 is starting to look quite tempting…
Hey AndrewM, nah I don’t think MR07 & the ugly duckling would be just flowering up something we already had. Would they???? :p
Just like so many other plans, rescue packages and stimulii they have given us………….
Realist,
well why should aussie tax payer money thats supposed to be to help aussie manufacturing industry be given out to off shore manufacturers???
Andrew M Says:
February 6th, 2009 at 5:37 pm
Realist,
well why should aussie tax payer money thats supposed to be to help aussie manufacturing industry be given out to off shore manufacturers???
C’mon you don’t think the have really thought that far ahead do you???? :-)
Frontman,
im starting to think the aussie government is run behind the scenes by Toyota.
the amount of smoke and mirrors that is going on was once only a stunt toyotas marketing people could pull off.
perhaps ruddy is a stig and his real identity is Mr toyota marketing???
Its the publics stupid fault for believing half the crap we get fed.
We are all just a bunch of pawns.
Andrew M Says:
February 6th, 2009 at 5:37 pm
“Realist,
well why should aussie tax payer money thats supposed to be to help aussie manufacturing industry be given out to off shore manufacturers???”
It’s supposed to help all people working IN the car industry i.e. all the manufacturers that import have thousands working for them too, directly or indirectly.
Andrew M Says:
February 6th, 2009 at 10:28 pm
“Frontman,
im starting to think the aussie government is run behind the scenes by Toyota.”
Could explain the TRD fiasco!! ;-)