New Car Sales - Why So Strong ?

[Rodge]

Noted the other day that new car sales for the year to date are very strong in Australia, up 9% compared to last year. http://www.goauto.com.au/mellor/mell...257A140006F070 Wrote this off as related to the strength of the Australian economy and couldn't be the case in New Zealand due to what feels like a recession here.
But I'm wrong, this seems incredible to me and I'm at a loss to explain this remarkable strength in new car sales.
http://www.stuff.co.nz/business/indu...e-sales-strong
Has anyone got any theories why new car sales are so strong ?

[Road_Warrior]

New car sales may be 'strong', but no detail has been provided as to who has been buying them (i.e. private buyers or companies/fleets).

[RedHotGT]

You do need to remember that sales were particularly low last year - so a 10% increase from the same period last year might not mean much.

[39ClevoUte]

Could be that the people held off because of the finance situation, and have now decided stuff it can't wait any longer and bought. I know heaps of people that lost big $ and stopped spending, once they get used to their new levels of $ they start again.

[Scott]

The mines are buying lots, particularly utes (note the strength in Hilux sales). Remember that last year panic set in about GFC II and the Mining Tax so there was a lot put on hold.

Rental fleets, in mining gateway towns, are massive now too.

I guess the cheap deals on Kia/Hyundai/Nissan etc etc is probably helping it all too. You can buy a new car cheaper than a used one and manufacturer warranty probably weighs in here too.

[Smoke Pursuit]

Fleets and government, not to mention the mining boom.

Most of the commercial cars sold in Australia are bought by mining companies, which is representative of why commercial vehicle sales are so strong. I have a mate who has a Ranger and its done 10,000 kms in 6 weeks, they get rid of them at 80,000 so that car will be gone within 12 months!

[Bossxr8]

Supplies of Japanese and Thai built vehicles slumped last year due to natural disasters, could be supply catching up.

[jimt3te50]

One of the things a lot of people overlook is the five year finance cycle- particularly business/lease buyers. Remembering how good 2007-2008 was such a bouyant time, those five year leases with residuals coming up means people will be buying again....

[jpd80]

Sales may be strong but also diverse, look at the list for May's top ten
'and note that only seven vehicles sold more than 2000 units..

Top ten selling vehicles May 2012:
1. Toyota Hilux 4626 (3539 AWD, 1087 2WD)
2. Mazda3 3288
3. Toyota Corolla 3155
4. Holden Cruze 2860
5. Holden Commodore 2521
6. Nissan Navara 2436
7. Hyundai i30 2159
8. Toyota Prado 1900
9. Toyota Camry 1850
10. Mitsubishi Triton 1845

(To all, Apologies for my recent error in posting April's figures in May V-FACTS discussion)

[Shonky.]

see the GDP numbers?

[IDT]

Originally Posted by Scott

The mines are buying lots, particularly utes (note the strength in Hilux sales). Remember that last year panic set in about GFC II and the Mining Tax so there was a lot put on hold.

Rental fleets, in mining gateway towns, are massive now too.

I guess the cheap deals on Kia/Hyundai/Nissan etc etc is probably helping it all too. You can buy a new car cheaper than a used one and manufacturer warranty probably weighs in here too.

The Hilux sales are interesting considering BHP's announcement that they are going 5 star rated fleets and enforcing the requirement that all vehicles that travel on public roads must be rated thus to the point they have V8 cruisers that are restricted to onsite use only and are no longer road registered to prevent them being taken off site . I wonder how toyota's 4WD sales will be effected over the next few months as contracted companies are required to meet the new requirements.

[jpd80]

Do people think that Toyota is not aware of this and hasn't taken steps to secure its market?

And since when is the Hilux the choice of mine cars?
Mine cars are normally Land Cruiser and Patrol, Hilux and Navarra are mostly bought by companies
that service the mines and other industries and further to that, BHP have said that existing 4 star vehicles
owned by them will continue to be operated until their leases rbn out.

[mik]

Originally Posted by shonkymofo

see the GDP numbers?

yeah , saw them, looking back at the history though , imo a short time ago they where fairly lack lustre, one short upwards spike does`nt make nirvana, next month they may be lack lustre again.
no idea about the car sales though, is it possibly sales are artificially up due to worry`s of the impending Carbon Tax possible price rises? if i`m right, this time next year we may be looking at a different picture......or not.

[blk6t]

Originally Posted by jimt3te50

One of the things a lot of people overlook is the five year finance cycle- particularly business/lease buyers. Remembering how good 2007-2008 was such a bouyant time, those five year leases with residuals coming up means people will be buying again....

Spot on, I think this is a big reason, rewind 5 years, the economy was in a much better shape and people were spending big on anything and everything.

People usually opted for the 5 year car loan with a balloon as it makes for the lowest repayment possible. This also includes businesses...

Now their loans are up and time to upgrade...

Of course there are a number of factors but I think this is a key factor.

[Shonky.]

Originally Posted by mik

yeah , saw them, looking back at the history though , imo a short time ago they where fairly lack lustre, one short upwards spike does`nt make nirvana, next month they may be lack lustre again.
no idea about the car sales though, is it possibly sales are artificially up due to worry`s of the impending Carbon Tax possible price rises? if i`m right, this time next year we may be looking at a different picture......or not.

Hopefully they'll boost confidence a bit though. Private consumption behaviour is largely driven by expectation.

Maybe these figures can counter the negative perception that the RBA unfortunately also create when they cut rates (good reason to move steadily rather than shock the system into a lower spending climate)

[Rodge]

GDP number sure was a surprise and thanks Gents for all the other possible reasons. Perhaps in addition to the above reasons many of you have noted we're also seeing people just sick of the whole slow motion train wreck thing the GFC is, so there's some pent up demand from people just tired of holding off...or perhaps its people frustrated by the higher fuel prices and making the move to get in front of the situation by getting a more efficient vehicle or most likely a combination of these factors and all the others you guys have posted.

[IDT]

Originally Posted by jpd80

Do people think that Toyota is not aware of this and hasn't taken steps to secure its market?

And since when is the Hilux the choice of mine cars?
Mine cars are normally Land Cruiser and Patrol, Hilux and Navarra are mostly bought by companies
that service the mines and other industries and further to that, BHP have said that existing 4 star vehicles
owned by them will continue to be operated until their leases rbn out.

I for one think Toyota were not aware of this until after the decision was made.
Are you accusing me of saying that Hilux's were the mine site vehicle of choice? or are you saying BHP have none? Did I not ask "what will happen over ther next few months as contracted companies are forced to comply? Seems you are reading words that are not there.