Coronavirus crushes struggling motor trade

The coronavirus pandemic has only worsened the two-year slump in new vehicle sales.

New vehicle sales have been declining for two years.

The coronavirus crisis crushed new car sales in March, with purchases tracking 18 per cent below the same month in 2019 despite many dealerships staying open through the health scare.

There were 81,690 new vehicles bought last month, data from the Federal Chamber of Automotive Industries showed. That was 2 per cent above the February result, but almost a fifth lower than in the same period a year before.

It was the 24th consecutive month that sales have dropped on a year prior basis, speaking to a lengthy slump for the industry which has only intensified as the epidemic triggers a sudden drop-off in economic activity.

FCAI chief executive Tony Weber said that “many dealerships have opted to remain open to maintain support for customers, particularly from a service perspective, during this difficult period”.

“Of particular importance are first responder and essential services vehicles. We must keep these vehicles on the road to ensure our communities continue to function and remain safe,” Mr Weber said.

Separate data from the Australian Bureau of Statistics, released this morning, showed a surge in grocery shopping helped lift retail sales by 0.5 per cent in February.

ABS director of quarterly economy-wide surveys Ben James said retailers reported a range of impacts from COVID-19, with increases in food retailing slightly offset by falls in more discretionary spending”.

The China travel ban was implemented on January 31, and the ABS retail trade figures showed Australians had already begun stocking up on supermarket items even before infection rates and the associated social distancing measures started in March.

ABS special analysis shows that discretionary and non-discretionary grocery items increased by 6.1 per cent and 9.4 per cent, respectively, compared to February 2019.

“Some businesses, especially those reliant on tourism, reported adverse impacts to turnover,” the ABS said.

“Other businesses saw little impact in February from COVID-19 but expect significant impacts in the March reference month, as restrictions on trading were increased.”