2013 set to make new car sales record for second year in a row despite Fringe Benefits Tax row

AUSTRALIA is on track for a new-car sales record for the second year in a row despite changes to the Fringe Benefits Tax.

2013 is also set to be the first year when passenger car sales represent less than half the market.

AUSTRALIA is on track for a new-car sales record for the second year in a row despite the previous government's attempts to introduce changes to the Fringe Benefits Tax.

Up to 10,000 new-car sales were "wiped" in just three months and the market is yet to fully recover from the proposed FBT changes - which Federal Treasurer Joe Hockey formally axed last week - according to Australia's largest car maker Toyota.

"It's definitely cost us," said Toyota Australia executive director of sales and marketing, Tony Cramb.

"The fleets aren't back yet. Until the Federal Government formally announced the changes weren't going ahead, a lot of companies were sceptical, sitting on their hands, and extending leases."

Mr Cramb said new-car sales to business and government were also affected.

"This year, sales to business are likely to be static or even fall, even though they were running four per cent ahead of last year at the end of June. It's not hard to see where the turnaround occurred," said Mr Cramb, referring to the July FBT announcement.

Industry figures show that more than 80 per cent of car buyers who take advantage of the FBT rules that the Rudd Government tried to overhaul are public sectors workers such as teachers, nurses and police.

Mr Cramb said the "uncertainty caused by the proposed FBT changes" sent business sales down 10 per cent in August, September and October.

Showing the extent of the damage new figures reveal that private buyers have been the driving force in new-car sales, with deliveries to individuals up by 7 per cent.

"Through all the uncertainty, it's been the private buyer who has really driven the market this year," said Mr Cramb.

Last year Australians bought 1,112,032 new cars but Toyota believes the record will come in at close to 1,140,000, the second time it will have passed the 1.1 million mark and the sixth time it will have eclipsed the 1 million mark in seven years.

"More than 85 per cent of the year is in the bank, leading to confidence that the total market is well on track for another record," said Mr Cramb.

"Indications are that this year will be around 20,000 higher than last year. That will be a remarkable result in what has been a tough 12 months."

Meanwhile Australia is on track to break another record: there is every chance 2013 will be the first time passenger car sales represent less than half the market (49.8 per cent year to date).

"Some of the people who would previously have bought a medium or large car are now downsizing to a small car; many others have instead turned to SUVs," said Mr Cramb.

"As a result, this will be another record year for SUVs - up about eight per cent on last year's all-time record and knocking on the door of a 30 per cent share of the entire market."

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