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Australia Autos Report Q3 2010
Management Report
Published: June 2010
Pages: 50
Tables: For full details, please email keithw@cmsinfo.com
From: GBP 353.33 Buy Now!
Research from: Business Monitor International
Sector: Automotive
We expect a 5% rise in new vehicle sales in 2010, to a total of just below 980,000 units. This forecast may appear conservative, given that the first three months of 2010 generated total new vehicle sales in Australia of 251,827 units, up 18.2% y-o-y, according to the Federal Chamber of Automotive Industries (FCAI). However, interest rate hikes are likely to put a brake on sales; a fact acknowledged even by the FCAI. Commenting on the sales figures for March 2010 (up 25.2% y-o-y, to 94,744 units), FCAI Chief Executive Andrew McKellar said: ‘with warnings of further interest rate rises, private buyers should move to take advantage of the current rate levels.’ In early April 2010, the central bank increased its key interest rate by 0.25% to 4.25%. Further rate increases are most probably in the pipeline, as the central bank seeks to keep a lid on inflation, which is becoming an increasing threat, as a result of the economic recovery. Base effects are also likely to constrain y-o-y % growth later in the year.
We expect a 5% rise in new vehicle sales in 2010, to a total of just below 980,000 units. This forecast may appear conservative, given that the first three months of 2010 generated total new vehicle sales in Australia of 251,827 units, up 18.2% y-o-y, according to the Federal Chamber of Automotive Industries (FCAI). However, interest rate hikes are likely to put a brake on sales; a fact acknowledged even by the FCAI. Commenting on the sales figures for March 2010 (up 25.2% y-o-y, to 94,744 units), FCAI Chief Executive Andrew McKellar said: ‘with warnings of further interest rate rises, private buyers should move to take advantage of the current rate levels.’ In early April 2010, the central bank increased its key interest rate by 0.25% to 4.25%. Further rate increases are most probably in the pipeline, as the central bank seeks to keep a lid on inflation, which is becoming an increasing threat, as a result of the economic recovery. Base effects are also likely to constrain y-o-y % growth later in the year.
Vehicle production in Australia reached 223,354 units in 2009, according to the FCAI, down 32% on the 329,556 produced in 2008. Although the global economic downturn is clearly partly to blame for this poor performance, the withdrawal of Mitsubishi Motors from local production also played a significant role. We are cautiously optimistic for the industry in the longer term, based on initiatives by both the government and manufacturers to develop large-scale production and increase use of fuel-efficient vehicles. We expect growth in vehicle production in Australia of between 4% and 5% per annum during the remainder of our forecast period to 2014.
In April 2010, the Australian government appeared to rule out providing incentives for consumers to buy electric vehicles or hybrids. Senator Kim Carr, the Minister for Innovation, Industry, Science and Research, told the Sydney Morning Herald: ‘the most rapid and cost effective way of improving fuel economy and building more environmentally effective cars is to adapt technologies that are being deployed now.’ He added the government was of the view that developing existing technologies for diesel, petrol and LPG engines would be more likely to yield results, than providing incentives for electric vehicles. This position comes despite the policies of the cities of Melbourne, Sydney and Perth, which are all prioritising the development of facilities to support electric vehicles.
Vehicle production in Australia reached 223,354 units in 2009, according to the FCAI, down 32% on the 329,556 produced in 2008. Although the global economic downturn is clearly partly to blame for this poor performance, the withdrawal of Mitsubishi Motors from local production also played a significant role. We are cautiously optimistic for the industry in the longer term, based on initiatives by both the government and manufacturers to develop large-scale production and increase use of fuel-efficient vehicles. We expect growth in vehicle production in Australia of between 4% and 5% per annum during the remainder of our forecast period to 2014.
In April 2010, the Australian government appeared to rule out providing incentives for consumers to buy electric vehicles or hybrids. Senator Kim Carr, the Minister for Innovation, Industry, Science and Research, told the Sydney Morning Herald: ‘the most rapid and cost effective way of improving fuel economy and building more environmentally effective cars is to adapt technologies that are being deployed now.’ He added the government was of the view that developing existing technologies for diesel, petrol and LPG engines would be more likely to yield results, than providing incentives for electric vehicles. This position comes despite the policies of the cities of Melbourne, Sydney and Perth, which are all prioritising the development of facilities to support electric vehicles.