Coronavirus: Sales of new cars plummet by 60pc in a week

Mixed messaging from government and customer fears of coronavirus are taking a large toll on the industry.

MTAA chief executive Richard Dudley says there had been a 56.16 per cent decline in new car sales between March 16 and last Friday.

New car sales across Australia have crashed by nearly 60 per cent in the space of a week, as the corona­virus pandemic and government calls on people not to travel cripples vehicle dealerships.

A members survey by the Motor Trades Association of Australia, covering 58 dealerships and more than 2500 employees, has also found a surge in car-servicing cancellations, a halving in new ­vehicle finance contracts and a 21 per cent decline in daily car parts sales since March 16.

Some car lots are taking new vehicles to customers’ homes to test drive because consumers ­refuse to go into dealerships for fear of contracting COVID-19.

MTAA chief executive Richard Dudley told The Australian there had been a 56.16 per cent decline in new car sales between March 16 and last Friday, and social-distancing rules were influencing customers to stay away from dealerships.

“One dealer group representing several brands across multiple sites has seen six-monthly average daily car sales of 12 (average 72 sales a week) fall to three sales only this week,” he said.

“Another dealer group selling an average of 43 vehicles a day over the past six months has witnessed a reduction to just 12 on ­average a day this week.

“Almost all dealers … are reporting increased cancellation of sales made in the past fortnight. Cancellations anecdotally seem to be tracking against increases in home-based work, social distancing measures and concerns over future employment/income.”

The hit to car dealerships in Australia from coronavirus has come as global car manufacturers in the US, South Korea and Japan shut down because of outbreaks in their countries.

Mr Dudley called on the nat­ional cabinet, manufacturers and banks to provide more help to the struggling car sector. “MTAA is calling on manufacturers to forgive sales targets for at least the next six months and maintain payments, including incentives.

“There are significant impacts from land tax and payroll tax (in states and territories where relief has not been provided yet).

“Dealers are also calling for increased assistance from banks and lending institutions because of the considerable investments and floor plan financing required by dealerships to operate.”

Melbourne car dealer Sid Cetindag, who runs eight separate lots in the city’s west, said mixed messaging from government and customer fears of the virus were taking a toll on his business and his employees.