Happy EOFY for the Automotive Industry
June saw records being broken, not only in the sales department but also with record low interest rates from the RBA and the unexpected $20,000 tax cut by the federal government for small business owners.
Even more records were broken during EOFY when on Tuesday June 30 the hotted up Nissan Juke Nismo RS broke the world record for the fastest one mile on two wheels by a four wheel drive car.
All of these factors (other than the Nissan Juke of course) should have spelled a Goldilocks period for the automotive industry spanning car manufacturers, dealerships and car finance brokerages alike.
Let’s see how the ideal conditions played out for car dealerships.
Dealerships and Car Finance Brokerages are Celebrating Record Numbers
According to official figures released by the Federal Chamber of Automotive Industries (fcai) www.fcai.com.au at midday today (03/07/2015), overall sales of motor vehicles for the month of June are up 6.4% from the same period last year. This sales boost of over 7000 cars from the same month last year is great news for the car market in Australia but is it great news across the board?
Figures show that all states except Western Australia, South Australia and Northern Territory had an increase in sales figures with Tasmania up a whopping 14.1%.
These sales were surprising as according to the Westpac Banking Corporation Consumer Confidence Index Survey, Australian confidence dropped by 7.1 points between the Month of May 2015 and June 2015. Take into account global uncertainty, the weak Australian dollar and automotive flops like the Takata airbag recall and the opposite could have been predicted for the “struggling” auto industry. I applaud the effort from the entire industry to keep customers excited and ready to buy even with all the negative media.
Low car finance rates and tax breaks weren’t the only driving factor behind the sales record, some clever advertising by auto brands helped draw the big crowds to dealerships and be seduced by the new models in stock.
For Hyundai, their straight shooting advertising paid off once again by offering their automatic i30 hatchback for $19,990 drive away. This pushed the i30 to the head of the pack, selling 1350 more than the Toyota Corolla and 1370 more than the Mazda 3. This is impressive considering the Corolla and Mazda 3 come in both hatchback and sedan.
The same tactic of showing their cards worked well in the late 1990s when the South Korean manufacturer priced and advertised the very popular Excel for a low $13,990 drive away, allowing consumers to understand their financial commitments before looking at purchasing the car.
Another clever part about the price point was that they came just under the $20,000 tax break that the government announced on May 12, 2015, making the car an excellent choice as a run-around for small businesses.
Unfortunately for Nissan, their Advertising pitch flopped and saw the automotive brand post a 16.9% decline in sales for the same period. By using vague advertising such as ‘talk a deal’ and by not disclosing a drive away price, Nissan learnt the hard way that Australian’s love to call a spade a spade.
Nissan weren’t the only ones to take a dive, our local boys Ford and Holden also posted a decline in sales due to rising competition from European, Japanese and South Korean manufacturers although Holden did keep their spot at number 2 in the top 10 car brands of 2015.
Aside from the small negatives mentioned above, the Automotive Industry as a whole has come up on top in what could be considered an unpredictable industry and a challenging time for Australian confidence.
Now that the June 30 EOFY hype is over, you may think that all the sales have ended. Let me tell you that whilst sitting here writing this article and listening to the radio, I have heard 6 advertisements from dealerships offering end of financial year deals. So when you are ready to buy, give 360 Finance a call on 1300 361 360 and we will get a great deal on the finance as well!