Noticed a lot of new car advertisements lately?
The new car market is in trouble and industry heavyweights are into an outsized promotional push, trying to head off what is currently expected by the industry to be final sales in 2020 down by a quarter.
The October sales data won't help, with passenger car sales down 22% compared with the same month a year ago.
For the full year to October, only 85,000 new cars have been sold, an 18% fall from the pre-pandemic February 2020 annual rate of just under 108,000. That is a fast fall in just eight months, taking the annual rate back to the 2014 level.
The speed of the fall is notable too.
There was also a fast fall in the Global Financial Crisis. In the 18 months between June 2008 and December 2009 the annual new car sales rate fell 30% (from 78,500 to 54,400). You do have to wonder where the 2020 decline will end up if this event also lasts 18 months until it picks up again.
The one sector that is being hit the hardest is traditional sedans. These are down 50% in October from the same month a year ago, and now constitute a small, specialised 28% corner of a market dominated by SUVs.
And NEVs (new energy vehicles) aren't giving car sales much of a push either. There were 107 pure electric vehicles, 60 PHEVs and 787 hybrid vehicles sold in the month, together taking just an 11% share in October and lower than the 16% share in September.
Sales of new cars to rental companies did pick up a bit in October, but were still less than 400 and this lack is a part of why the overall market is down. (This is less than 10% of the number of cars sold into rental fleets in October 2019).
The one segment that is largely holding up is SUV sales. These are down only 7.6% in October on a year-on-year basis.
(And finally, we should note that commercial vehicle sales, largely utes, are not booming either. There were down 17% year on year and such declines have now been recorded in 17 of the previous 18 months.)
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