Car dealers are starting to use the ‘R’ word – recession – as enquiries in November slump to a new low.
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EXCLUSIVE

The true depth of Holden’s sales disaster will be exposed 24 hours from now, with official figures expected to show the former top-selling brand sold just 2665 cars in November – half what it sold at the same time last year and its weakest monthly result since the company was established 71 years ago.

It is the sixth record low for Holden in 11 months. The figure is so low that each of the top three selling cars outsold the entire Holden line-up last month (see tables below).

The Toyota HiLux is on track to become Australia’s top-selling vehicle outright for 2019 – as utes filled the Top Three positions in November 2019 – however Toyota’s popular double cab 4x4 is under siege.

The Ford Ranger 4x4 has outsold Toyota HiLux 4x4 for the eighth month in a row, and the Mitsubishi Triton 4x4 came close to beating the HiLux 4x4.

However, when 4x4 and 4x2 sales are combined – as is industry practice to tally nameplates, not variants – the HiLux has an unassailable lead and is on track to notch up its fourth year in a row as Australia’s top selling vehicle.

The news is grim across the rest of the car industry, however. Eleven of the Top 12 brands posted massive sales declines and Holden was pushed to 11th place.

Isuzu, which has just two models in its line-up, was not far from overtaking Holden for the first time ever.

Official VFACTS new-car sales figures due to be released tomorrow are expected to show the biggest monthly slowdown since the Global Financial Crisis a decade ago.

To the end of October, new-car sales were down by 8.0 per cent but November figures are expected to show the decline has accelerated.

Preliminary sales figures for top-selling cars are accurate as they are shared confidentially among car companies on the first day on the month, however not every brand participates.

The official figures for the entire industry are due to be published at midday tomorrow, and will give a clearer indication of the market slowdown.

A veteran car dealer, who represents multiple Top 10 brands at several sites across metropolitan Sydney, told CarAdvice on condition of anonymity that he believes Australia is in a “consumer recession, but no-one has said the ‘R’ word yet”.

“Private buyers are staying away but business fleets are still buying,” he said. However, the most recent official year-to-date figures show new-car sales to private customers are down by 7.3 per cent, sales to fleets are down by 9.3 per cent and sales to government fleets are down 5.0 per cent.

Meanwhile, Westpac data shows consumer confidence has hit a four-year low, despite record low interest rates.

Finance experts now believe cutting interest rates is helping the real estate market, but it no longer spurs economic growth, and continued interest rate reductions are hurting consumer confidence.

Former Mercedes-Benz executive, now an automotive industry analyst, David McCarthy said: “We are not technically in a recession, but there is no doubt car dealers across most brands are struggling with the lowest profit margins in years, tighter consumer credit requirements, and falling sales.”

The only bright spot for car dealers is the value of the land their showrooms are sitting on, he said.

“The real estate many dealerships sit on is effectively worth more than the business goodwill in many cases,” said Mr McCarthy.

Last month, the chief executive of the Federal Chamber of Automotive Industries, Tony Weber, said while the drought and other domestic conditions are impacting new-car sales “our key concern is the effect over-regulation of the financial sector is having”.

“(We) have been concerned about the risk-averse approach to lending in Australia for some time and see improved access to finance as a key to driving economic growth in 2020,” Mr Weber said in November.

The record low sales give new-car buyers the upper hand as Australia comes into bargain-hunting season.

The months of December and January always prompt sharp discounts because dealers are trying to clear this year’s stock ahead of next year’s new arrivals – at a time when enquiries are down because most people are on holidays.

Top 12 brands in November 2019*

  • Toyota 16,960 down 7.2 per cent
  • Hyundai 6830 down 13.2 per cent
  • Mitsubishi 6825 down 1.8 per cent
  • Mazda 6170 down 30.7 per cent
  • Kia 5140 up 10.7 per cent
  • Ford 4995 down 10.0 per cent
  • Nissan 4270 down 19.8 per cent
  • Volkswagen 3920 down 16.8 per cent
  • Honda 3285 down 12.0 per cent
  • Subaru 3140 down 19.9 per cent
  • Holden 2665 down 48 per cent
  • Isuzu 2160 down 9.5 per cent

Top 12 selling cars in November 2019*

  • Toyota HiLux 3685 down 21.0 per cent
  • Ford Ranger 3490 up 0.6 per cent
  • Mitsubishi Triton 3065 up 27 per cent
  • Hyundai i30 2340 down 1.6 per cent
  • Toyota RAV4 2315 up 19.6 per cent
  • Toyota Corolla 2230 down 16.0 per cent
  • Toyota Camry 2000 up 54.6 per cent
  • Nissan X-Trail 1880 down 3.0 per cent
  • Mazda CX-5 1735 down 13 per cent
  • Kia Cerato 1640 up 21.3 per cent
  • Mitsubishi Outlander 1525 up 52.6 per cent
  • Hyundai Tucson 1445 down 11.0 per cent

*Preliminary figures, rounded.