The new car market is likely to dive further this year, with tougher rules on financing and the falling price of houses in the majority of capital cities around Australia having a negative impact.
That's according to Mazda Australia's boss, speaking with CarAdvice at the Geneva motor show.
February saw the biggest market slowdown since the Global Financial Crisis in Australia. Mazda sales were down 6.8 per cent compared to the same month last year, with market leader Toyota down 10.5 percent. Hyundai was down a staggering 19.6 percent.
Vinesh Bhindi, managing director of Mazda Australia, admitted this year is likely to be another tough one for the industry, although Mazda Australia has maintained its own internal targets.
“In 2019 the market is going to decline a little bit more,” Bhindi said.
“There is a lot of it coming from what we term the ‘credit crunch’ due to the royal commission and new automotive financing requirements, that’s a level playing field for all, but it is making it harder or consumers to get the credit they want," he explained.
"That’s one element, the second element is, in particular in Sydney and Melbourne, house pricing and the perception of a reduction in personal wealth is probably pausing customers to make decisions... But the industry does go through cycles, at some point when there is a number of new models coming it, it will drive activity. ”
Bhindi remains positive about Mazda’s business prospects this year, also noting some other manufacturers are now showing more ‘natural’ numbers, hinting at the dealer practice of registering unsold cars to gain sales bonuses – a concept that doesn’t apply to Mazda (or Toyota) dealers.
“We are happy with the way it is, our results for the start of 2019 is on target, but we know the market is going to be slightly less than last year. There is a bit of correction going on from manufacturers that probably pushed a little bit harder in the years gone by. You’re seeing a more natural number of where the market is at.”
Mazda’s introduction of a five-year warranty has seemingly had no effect on increasing sales either, with Bhindi confirming that it was merely a formality on the company’s behalf given its requirements under Australian Consumer Law.
“It’s a positive that we are offering it upfront but for our loyal customers it was never an issue, we know that we produce high-quality vehicles.”
The month of March is likely going to see plenty of retail offers across the board as the industry looks to rebound for what is traditionally the second biggest month for sales.