14/01/2009 - 22:00

Economic speed bump slows new car sales

14/01/2009 - 22:00

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DESPITE a significant fall in new vehicle sales across the country in 2008, car dealers in Western Australia retain a positive outlook for the year ahead.

DESPITE a significant fall in new vehicle sales across the country in 2008, car dealers in Western Australia retain a positive outlook for the year ahead.

According to the Department for Planning and Infrastructure, there were more than 1.6 million passenger vehicles registered in WA.

And new vehicle sales figures from the Federal Chamber of Automotive Industries indicate that there have been more than 539,000 new passenger vehicles sold in WA in the past five years.

This equates to just more than a third of the cars on the state's roads having been new vehicle purchases during the past five years.

But last year there was a decline in the number of new vehicles bought in WA, especially in December, where vehicle sales dropped by 14.2 per cent compared to an 11.3 per cent drop nationally. Only Tasmania and Queensland experienced larger falls in new vehicle sales for December, both at 17 per cent.

Despite this fall in sales, and economic slowdown, car dealers are confident about the industry's long-term prospects while remaining realistic about the difficulties in the short-term.

Automotive Holdings Group's managing director Bronte Howson said his company's volumes were down from a national perspective, but in WA they held their own.

"We've been through some of these hard times before ... but I think the thing you're looking at the next year is it's going to be tight during the first quarter," Mr Howson told WA Business News.

"Currently, manufacturers are still trying to clear stock. They had ample stock in the country."

But Mr Howson appreciates the challenges facing his industry over the next few years.

"Unemployment's going to be a factor in the year ahead, but I still believe that this year we'll be probably have about 920,000 or so vehicles [sold nationally] and maybe a little bit higher," he said.

"That's generally looking around 10 per cent off of a million."

Managing director of the Magic Group, Richard Bennett, agrees on the future difficulties facing the industry.

"We're on budget, so that's nice, but it's going to be a very difficult 12 months ahead," Mr Bennett said. "In 2009, the sales will probably come off a good 15-20 per cent nationally ... so I think you'll see a market that's gone from a million to somewhere between 800,000-850,000.

"The main mixture will be some of the big fleet businesses really pulling back on their purchases because a lot of them are pulling back on their staff numbers."

John Hughes sales director Gary Fitch agrees that fleet business will slow, but he's adamant there's no downturn at his dealership.

"There's not a downturn, in my opinion anyway, certainly not at this dealership," Mr Fitch said.

"I'd say at the minute things are going very well in the retail side of the industry. We budget ourselves to sell just under 1,500 cars per month and we've been doing that month in, month out.

"In '07, it was an all time record year ... you can't have record on record on record.

"The total was very strong ... second time over a million, so how is the industry quiet?

"The industry is fine."

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