Risk-averse approach to lending is hurting new-car sales

Aussies continue to tighten their belts as the local new-car market suffered its 19th-consecutive month of decreasing sales, slipping to 82,456 units for October.

While more than a million total sales for 2019 is still achievable, the market fell by 9.1 percent (8262 cars) compared to October 2018.

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Chief executive of the FCAI, Tony Webber, said that 2019 has seen almost 78,000 fewer units sold to date compared to 2018, which is an 8 percent decrease, and believes that there are several factors accounting for the decline.

“While the drought and other domestic conditions are impacting the market, our key concern is the effect over-regulation of the financial sector is having on new vehicle sales.

“The FCAI and our members have been concerned about the risk-averse approach to lending in Australia for some time and see improved access to finance as a key to driving economic growth in 2020,” Webber said.

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Even the popular SUV segment is down 3 percent (1201 vehicles).

Looking at the top 10 brands for the month, all manufacturers are struggling to increase sales compared to this time last year.

“Of particular interest is the fact that sales are down across all buyer types, with private sales down 5.2 percent compared to October 2018, business sales are down 8.2 percent and government sales are down 7.3 percent.”

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However, Kia seems to be bucking the trend and continues to rise up the ranks. The Korean brand has risen to fourth within the rankings with 5062 sales in October – put into perspective, parent company Hyundai sold 7455 cars to be second on the list.

Toyota continues to top the market (16,988) with Mazda (6370) rounding out the podium behind Hyundai.

Interestingly, Holden is clinging on to a top-10 position in ninth with 3086 sales, with Honda nipping at its heels with 2761.