Car dealers representing some of Australia’s biggest brands are cautiously optimistic about a market recovery in May – and believe the worst of the coronavirus crisis might be behind them after a shocker in April saw sales slashed by 48.5 per cent.
Veteran multi-franchise car dealers are divided on how quickly the new-car market will be back to pre-COVID-19 levels.
UPDATE 2 June 2020: Since this article was published, some of the Top 12 brands which exchanged preliminary sales data and have forecast a market slowdown of 25 to 35 per cent in May, which is being seen as a sign of the beginning of a recovery. Some states such as NSW are believed to have performed more strongly than Queensland and Victoria where there were tighter restrictions.
Some dealers claim industry-wide sales for May could be almost as strong as last year because many buyers stayed out of the market in April.
Other dealers, however, believe the official figures – due to be released late this week – will still show a significant decline.
There was general consensus, though, that it is unlikely the 48.5 per cent drop in April will be repeated in May.
“As soon as the government started talking about lifting (social) restrictions, people had confidence to come in and look at buying a car,” said one multi-franchise dealer.
Dealers contacted by CarAdvice still had concerns about “risk averse” finance companies. Indeed, most claimed finance companies were knocking back more loan applications than they were approving, as was the case last month.
“Fleet sales are down but enquiry from private buyers is strong,” said another longstanding dealer. “The next hurdle is getting them finance.”
Sales of utes were strong, according to dealers polled by CarAdvice, and some showrooms claimed they were almost back to last May’s delivery levels. However, that feedback was not universal.
A dealer representing one of Australia’s leading car brands said his May sales were down by 7 per cent compared to the same month the previous year.
Other dealers did it tougher in May, but in a positive sign they had to bring back sales staff and mechanics – after moving them to reduced hours and fewer days through the COVID-19 lockdowns – just to be able to deliver cars.
The CEO of the Australian Automotive Dealers Association (AADA), James Voortman, told CarAdvice: “We are hopeful the worst is behind us and reports from dealers are that customers are returning to showrooms.”
“However,” Mr Voortman cautioned, “May and June are always good months and I believe there is some pent up demand at play.”
Mr Voortman said: “I won't declare victory yet, as one or two good months need to be assessed against a few rough years, but it is good to hear sales are heading in the right direction.”
While the official new-car sales figures for May are not due to be released until later this week, many in the industry are not expecting a repeat of April’s dramatic sales slide, which was the biggest year-on-year drop in at least three decades.