Car sales data for April shows sluggish conditions

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Car sales face tough conditions in 2023 due to a multitude of factors – and that’s both new and used cars.

The April 2023 VFACTS report shows it was another weak month of new car deliveries in Australia with the lowest total tally (82,137 deliveries) so far this year. Hurting vehicle sales is continued cost of living pressure along with supply problems including production restrictions and shipping delays.

Year-to-date, sales are higher than the ten-year average, although that is skewed by horrible 2020 sales during the COVID pandemic when deliveries were down close to 70,000 units.

The year-on-year picture looks rosier, with 82,137 deliveries in April 2023 topping the 2022 April figure of 81,065. But 2022 was no bumper year and no benchmark to compare. In comparison to two years ago, April 2021 saw a record 93,247 deliveries – more than 10,000 vehicles beyond this year’s month.

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However, there’s no denying that electric vehicle sales continue to look strong. Almost one in ten of all vehicles delivered in April was an EV. “Electric vehicles accounted for 8 per cent of sales in April,” said FCAI Chief Executive Tony Weber. “This is well up from 1.1 per cent compared with April 2022. If you take all forms of electrification, that number has increased from 9.5 per cent to 15.4 per cent, and we know that this number would have been larger had the industry not faced global supply challenges.”

Global supply challenges affect not just EVs but normal combustion engine cars too – from diesel utes to petrol SUVs. But it is not just supply issues affecting car deliveries which are beginning to ease.

Around the world, high inflation has seen drastic increases to interest rates – none more as aggressive as New Zealand, which is now seeing the impact with falling house prices and stagnation. Australia meanwhile has seen over 12 months of rate increases (with just one month’s pause) yet inflation remains high at 7 per cent. The increased cost of living pressure alongside a much higher cash rate than a year ago seems to finally be hitting home and is likely delayed in its true effect on markets such as new car retail sales.

Looking closer at VFACTS, we wonder if market-leader Toyota is the bellwether to a larger slow down. Deliveries reported in April 2023 for the Japanese car maker were 12,029 units, down a whopping 33 per cent compared to April 2022 (17,956) and 40 per cent compared to April 2021 (20,208).

We expect there will be an increase in supply of cars (many likely accounted for already) as chip shortages are no longer as restrictive and production ramps up to improve deliveries across the new car market, however, contiued strain financially in Australia and dropping used car prices may keep new car sales stunted.

According to Moody’s Analytics Used-Vehicle Price Report, used car prices surged through COVID to levels unseen before. They are now 13.2 per cent lower than the peak of May 2022 and this trend is expected to continue throughout 2023.

As it is in April 2023, the top ten makers’ new car deliveries were dominated by Toyota with 12,029 units. This is followed by Mazda (6926), Kia (6200), Hyundai (5732), Ford (5047), Mitsubishi (4440), MG (3463), Tesla (3676), Subaru (2511) and Isuzu Ute (2904).

The top ten model chart sees the Ford Ranger and Toyota Hilux sitting at the top with 3567 and 3526 deliveries respectively. That’s only down 0.4 per cent year-on-year for the Ranger which had a poor April 2022, but is significantly lower for the Hilux YoY being 21.5 per cent lower. The Toyota RAV4 was the third best-selling car in April but, again, is down significantly YoY by 34.8 per cent, showing that some of Toyota’s woes are directly related to supply issues.

The electric Tesla Model Y took fourth spot with 2095 deliveries, followed by the Hyundai i30 (2029), Mitsubishi Outlander (1829 – up a whopping 68.4 YoY), Isuzu D-Max (1809), Hyundai Tucson (1678 – up 90.8 per cent YoY), MG ZS (1588) and Tesla Model 3 (1581).

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