Australian new car sales record tipped to tumble in 2014

FCAI CEO Tony Weber expects 1.145 million new passenger cars, SUVs and commercial vehicles will be sold in Australia in 2014, representing a 0.8 per cent increase over last year’s 1.136 total.

The increase would be the smallest sales increase in three years, following increases of 2.2 per cent last year and a significant 10.3 per cent in 2012.

Weber said the prediction represented “small growth on a strong base”.

“We’ve had big movements in the past two years,” Weber said, “and hopefully now we will have another solid year this year … and hopefully that will cement it and become a bit of a base for hopefully another spike somewhere in the future.

“We think the conditions are in play, that people will be turning over their cars and buying new cars, and that’s why we’re buoyant about the figures.”

Weber believes growth in the SUV and light commercial segments – up 8.5 and 3.5 per cent respectively – will continue this year, contributing to the anticipated record.

“I think they are the major areas because those cars provide a lot of flexibility for consumers and that’s what the market is really interested in.”

Weber said the previous government’s proposed changes to fringe benefits tax (FBT) rules had a big impact on new vehicle sales in the second half of 2013.

Sales across the country were up 4.7 per cent to the end of June – a figure that fell to less than half that by the end of the year.

He said 2014 would be an important year for reassuring new car shoppers that no changes to FBT rules were ever made.

“We think the FBT when it was announced in July really affected sales post that for a few months, and we suspect it may have even changed buyers’ behaviour in the longer term for some buyers.

“I think the important message is that consumers know that the FBT changes were never implemented and the status quo remains with that regime.”

He also expects government sales to pick up after falling 20.2 per cent in 2013.

“I think the government’s trends in sales probably changed,” Weber said.

“I think their strategies about how long they hold cars have probably changed. But inevitably those sales have to come back at some point to some degree, because their fleets must be getting older.”

Government sales totalled 40,747 in 2013, down from 51,038 in the previous year.