Australians treated themselves to more than 110,000 new cars in June 2020 – the strongest monthly result since June last year and better than was widely anticipated – as most of the nation gradually emerged from COVID-19 lockdowns.
The recovery was also driven by tradies and small businesses buoyed by the Federal Government’s $150,000 instant asset tax write-off, which saw all three German luxury brands – Audi, BMW and Mercedes and Japan's Lexus – post massive sales growth, and many mainstream dealers sell out of utes and vans even though the scheme was extended to the end of the year at the beginning of the month.
Australia's top-selling vehicle, the Toyota HiLux ute, posted an all-time monthly sales record – with 6537 deliveries its best result since June 2018 – while the Ford Ranger was the nation's top-selling four-wheel-drive.
Recreational vehicles and heavy duty four-wheel-drives also sold well as Australians plan to holiday at home in the wake of the coronavirus crisis, with sales gains for the Toyota Prado, Toyota LandCruiser and Nissan Patrol.
Contrary to earlier predictions between 85,000 and 95,000 vehicles would be delivered last month, official figures released today by the Federal Chamber of Automotive Industries showed a total of 110,234 were reported as sold in June 2020, a decline of only 6.4 per cent compared to the same month last year – and a stark contrast to the 35.3 per cent and 48.5 per cent declines in May and April respectively.
Sales of utes and vans surged by 8.6 per cent, and SUVs also outpaced the market (down by only 2.9 per cent versus the overall market decline of 6.4 per cent), however passenger cars got stuck in reverse (down 26.1 per cent), reflecting changing buyer preferences.
The new-car sales result for the first half of 2020 – 442,415 vehicles reported as sold – was down 20.2 per cent compared to the same period last year, following record declines in the grip of the crisis in April and May. And it was the 27th month in a row of year-on-year decline.
June 2020 was the second month in a row of month-to-month growth.
The surge was so unexpected the car industry is now bracing for a slowdown in the coming months as many dealers have run out of key models – in particular utes and vans – which historically post their best sales in the lead up to the end of the financial year, 30 June.
Factory shutdowns during the coronavirus crisis temporarily cut off supply of new models, and stronger than expected demand depleted many showrooms of remaining stock.
In a media statement the chief executive of the Federal Chamber of Automotive Industries, Tony Weber, said showroom traffic increased as COVID-19 restrictions eased.
“Stimulus packages from the Federal Government, such as Job Keeper and Job Seeker, have helped to restore some consumer confidence and supported the small bounce back during June,” said Mr Weber. “However, there’s no doubt that the new vehicle industry in Australia is still under high pressure.We’re not out of the woods yet.”
Australian Automotive Dealer Association CEO James Voortman said new-car sales are “still a long way from a full recovery across most sectors of the market” and it is “too soon to declare the industry downturn as over”.
Industry insiders believe factory shutdowns in the past few months will lead to a sales slowdown in July and August due to a lack of stock.
Toyota, the market leader for the past 17 years in a row, accounted for one in five of all new vehicles reported as sold, as its market share slipped from 26.5 per cent in April, and 24.2 per cent in May, to 20.7 per cent in June.
The Toyota HiLux ute remains Australia’s top-selling vehicle with a comfortable margin ahead of the Ford Ranger – when both the 4x2 and 4x4 segments are combined, as is industry practice.
Sales to private buyers fell by 7.9 per cent compared to the same month last year, while sales to business fleets increased by 6.3 per cent, and government deliveries dropped by 16.3 per cent.
Impact of $150,000 instant asset tax write-off scheme
In the first week of June 2020, the Federal Government extended the $150,000 instant asset write-off to the end of the year, in another attempt to jump-start the economy.
It means tradies and business buyers can claim the expense and receive the full deduction this financial year rather than spreading it over several years.
However, there is widespread confusion about how it applies to cars. In most cases, the instant asset write-off applies to motor vehicles valued up to $57,581.
The $150,000 limit applies to work vehicles that can carry more than one tonne or nine occupants or more.
It means some of the more expensive utes – such as US pick-ups – may not qualify for the $150,000 instant asset write-off because, despite their size, they are not rated to carry one tonne.
It means a portion of the business expense (up to $57,581) can be claimed in one lump sum this financial year, but the balance beyond that would need to be claimed in subsequent financial years.
The car industry, car dealers, and CarAdvice advise buyers to get their own independent tax advice to see how the $150,000 instant asset tax write-off might apply to their individual circumstances.
Top 15 car brands in June 2020
- Toyota: 22,867, up 7.9 per cent
- Mazda: 9420, down 12.8 per cent
- Hyundai: 7737, down 22.6 per cent
- Ford: 7624, up 6.6 per cent
- Mitsubishi: 7419, down 16.6 per cent
- Volkswagen: 5737, down 1.0 per cent
- Kia: 5727, down 20.5 per cent
- Mercedes: 4437, up 31.4 per cent
- Nissan: 4260, down 22.7 per cent
- Subaru: 3775, down 18.2 per cent
- Honda: 3423, down 45.1 per cent
- BMW: 3307, up 32 per cent
- Isuzu: 2656, down 11.4 per cent
- Audi: 2027, up 84.6 per cent
- Holden: 1912, down 60.3 per cent
Top 10 cars sold in June 2020
- Toyota HiLux: 6537, up 21.1 per cent
- Ford Ranger: 5329, up 9.9 per cent
- Toyota Corolla: 3008, down 4.1 per cent
- Mitsubishi Triton: 2721, up 1 per cent
- Toyota RAV4: 2632, up 7.5 per cent
- Mazda CX-5: 2530, down 13.1 per cent
- Toyota Prado: 2374, up 16.1 per cent
- Hyundai i30: 2368, down 29.2 per cent
- Hyundai Tucson: 2206, down 5.9 per cent
- Kia Cerato: 2016, down 28.8 per cent
Historical June new-car sales results
Source: Federal Chamber of Automotive Industries