Car makers pin hopes on Rudd stimulus

THE car industry is pinning its hopes on the Rudd stimulus package after sales slumped 19 per cent in January.

THE car industry is pinning its hopes on the Rudd stimulus package after sales slumped 19 per cent in January for their seventh successive monthly decline.

The January total of 67,079 sales meant 15,000 fewer buyers than in the same month in 2008 and the worst start for five years.

In worrying signs for the broader economy, business demand led the market exodus, slumping 23 per cent for the month.

It took the wind out of every vehicle category, pushing SUVs sales down 24 per cent, light commercial vehicles down 18 per cent and heavy vehicles 30 per cent.

“There's an underlying softening trend and there's some distance to go,” said Andrew McKellar, chief executive of the Federal Chamber of Automotive Industries which released the figures yesterday.

“But it could have been worse and compared with what the industry's experiencing in other markets around the world we're performing pretty well.”

He said Australia's economic circumstances were more sustainable than elsewhere and the Rudd government's increased investment allowance, announced yesterday, could help business demand recover.

Kim Rennick of industry consultant Autopolis was less sanguine.

“The moves by government might start business again and that's the key market here. But the jury's out on whether Australia will follow the rest of the world,” he said.

Tony Robinson of fleet consultant Innovation Sureplan said next month's result would be crucial.

“If it's under a 20 per cent fall again we could be in for a soft landing compared to what we're seeing overseas,” he said.

Fleets would return to the market next month, dealers had new lines of finance in place and used car values at auction had improved, he said.

In the absence of fleet buyers last month, Australian car-makers were among the worst hit with sales of locally built vehicles falling 22 per cent and accounting for just one in every eight vehicles sold.

Half of all large car buyers opted for the huge discounts available on Holden's Commodore, although that didn't stop it losing top spot to the Mazda 3 small car, a favourite with private buyers.

Bargain shoppers also drove Hyundai sales up 17 per cent as they snapped up its Getz and i30 hatchbacks.

But Hyundai was the exception as most brands suffered downturns more in line with the recent crash in the US and Europe.

Toyota continued its market leadership but its sales fell 25 per cent compared with last January. Meanwhile, Ford's were down 22 per cent, Nissan's 23 per cent and Mitsubishi's 20 per cent.

It was worse among the premium brands, where the luxury car tax increase last year has compounded buyer nervousness. Mercedes-Benz sales fell 42 per cent, Porsche 44 per cent and BMW 25 per cent.

Only Audi held its head above water although its 6 per cent increase showed the market has put a brake on its recent stratospheric growth.