Car sales hit top gear but a change down predicted
The Federal Chamber of Automotive Industries announced a record 1.1 million new car sales after what it said was increased competition, low tariffs and a strong dollar making exports more competitive.
But the chamber's chief executive, Tony Weber, predicted sales would soften to 1.075 million this year with a federal election and increased supply likely to dampen sales.
Others in the industry are more pessimistic, claiming the 2012 figure is artificial, propped up by carmakers registering cars before they have an owner to meet aggressive sales targets.
One industry executive, who declined to be named, said the real market was 750,000 to 800,000, and that dealers registered thousands of unsold vehicles to meet manufacturers' targets and collect bonuses.
Chamber figures count registrations only and some makers exploit the loophole.
The phenomenon, while not new, has grown this year as European manufacturers have pushed big volumes into the local market to compensate for dismal sales on the Continent.
Mr Weber defended the practice of registering cars without owners and said the cars would ultimately find buyers.
"I think the number we have here is a very valid number," he said.
"There's some discussion about the numbers but we have no reason to doubt them at this time. The reality is you cannot actually bring forward sales and make that a sustainable measure because ultimately those cars need to be sold."
Toyota's sales and marketing boss, Matt Callachor, said the boom in car sales was due to rising affordability: earnings were up, interest rates down and car prices had remained stable.
Frequently Asked Questions about this Article…
The Federal Chamber of Automotive Industries attributed the record 1.1 million registrations to increased competition, low tariffs and a strong Australian dollar that made exports more competitive. Toyota also pointed to rising affordability—higher earnings, lower interest rates and stable car prices—as a factor boosting demand.
There is debate. The chamber counts vehicle registrations and reported 1.1 million, but some industry executives say that number may be inflated by manufacturers and dealers registering cars before they have owners to meet aggressive sales targets, claiming the true market may be closer to 750,000–800,000. The chamber’s CEO, Tony Weber, defended the reported figures and said registered cars would ultimately find buyers.
The industry’s official totals are based on registrations, so registering vehicles—even those not yet sold to customers—adds to the headline sales figure. The article notes some makers exploit this registration-only counting method by registering unsold units to meet targets or collect bonuses.
Yes. Tony Weber predicted sales would soften to about 1.075 million due to factors such as an upcoming federal election and increased supply that could dampen demand. Other industry participants were even more pessimistic, arguing the 2012 result may not be sustainable.
European manufacturers reportedly pushed large volumes into the Australian market to offset poor sales in Europe. That practice contributed to the growth of registration-driven sales figures in 2012, according to the article.
For everyday investors, it means headline registration totals can overstate current consumer demand if unsold cars are being counted. While the chamber argued those cars will eventually sell, investors should be cautious interpreting registration-based growth as guaranteed sustained retail demand.
According to Toyota’s sales and marketing head Matt Callachor, affordability improved in 2012 because household earnings were rising, interest rates were lower and car prices had remained stable—conditions that made car ownership more accessible and supported stronger sales.
Based on the article, investors should monitor registration trends versus actual dealer sales or post-registration sell-through, changes in manufacturer supply strategies, macro factors like earnings and interest rates, and political events such as a federal election that could affect consumer confidence and demand.
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