Why June will be awesome for buying a new car

It’s hardly unexpected, but Australian new car sales are still off the boil, thanks to a perfect tsunami of COVID-19, crippling exchange rates and consumer disinterest in doing anything other than hiding under a mattress.

The May figures are a solid improvement over April’s carnage, but the most recent stats from the Federal Chamber of Automotive Industries (FCAI) still mark the 26th consecutive month of falls in new car sales.

Interestingly, it’s still possible to pick a small swing towards smaller, more affordable SUVs despite the carnage on new car dealer lots, as people take stock of the current economic climate and purchase accordingly.

As a whole, the Australian new car market slumped by some 35 percent year on year, with less than 60,000 new cars sold across Australia during May. However, it’s a 22,000-unit improvement over April.

“While COVID-19 is primarily a health crisis, it has brought about an economic crisis as well,” said the FCAI’s CEO, Tony Weber. “These are difficult times for the global and domestic economy, and this, of course, has repercussions for the local sales sector, including the automotive industry.

“Of key importance to the industry has been the topic of consumer confidence. The past few months have seen a contraction of household income and consequently household spending. This, combined with the uncertainty of the pandemic outcome, has severely curtailed retail activity.”

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The pain has been shared equally across all of the top ten brands on sale in Australia, though the overall natural order hasn’t changed much. Toyota’s HiLux – on the eve of the release of a mid-life facelift – topped the new car sales charts, pipping the Ford Ranger.

In fact, there are five Toyota products in the top ten, with the RAV4 muscling into third ahead of a resurgent LandCruiser in fourth and the Corolla in fifth.

The evergreen Prado was pipped for sixth in May by the Mazda CX-5, while the Hyundai i30, Mazda 3 and Hyundai Tucson round out the top ten.

From the gloom and doom, though, it’s possible to observe a couple of trends that bode well for a stronger finish to 2020.

Commercial vehicle sales – buses and light trucks, in the main – were largely resistant to the slow-down, which indicates that the government’s instant asset write-off plan appears to be having a positive impact - though it still pays to buy wisely.

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As well, sales of smaller, newer SUVs – like the Hyundai Venue and Volkswagen’s T-Cross – have started well, though the Holden Trax’s strong runout sales performance adds a false echo to the trend within the small SUV sector.

If we were going car shopping this month, though, we’d be eyeballing the big players in the medium SUV segment. The Hyundai Tucson, for example, should be selling better than it is, and dealers will likely be keen to play ball before the end of the financial year.

Likewise, the evergreen Mitsubishi Outlander and Nissan X-Trail SUVs both took a battering in May, and both brands will be keen to stem the flow of red ink in June.

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If you’re looking for a premium deal, the Mercedes-Benz GLC SUV could be where the smart money goes, while the ageing C-Class could also offer a cut-price opportunity to get aboard a three-pointed star.