Private car demand flags but business keeps on trucking

Strong business demand for SUVs and light trucks propped up car sales last year.

The Toyota HiLux was 2017’s top-selling model. Picture: Mark Bean

Strong business demand for SUVs and light trucks propped up car sales last year as private demand for mid-range passenger cars dropped sharply in the lead-up to Christmas.

As the last Australian-made cars rolled off the production line, total car sales hit a record of almost 1.19 million in 2017, thanks largely to a 2.6 per cent jump in business purchases that offset a slide in private demand.

Sales of SUVs outnumbered ordinary passenger cars for the first time, making 39 per cent of the total car market against 37.8 per cent for ordinary cars.

“The shift in industry dynamic we observed last year has now become entrenched in our market. It is a growth pattern that we expect will continue,” said Tony Weber, chief executive of the Federal Chamber of Automotive Industries, which published the figures.

Mr Weber said fierce competition among brands was fuelling sales growth.

Total sales rose almost 1 per cent over the year, masking a 2.5 per cent drop to 557,000 units in the number of private vehicle sales in 2017. This included an 8 per cent slump last month, compared with December 2016.

Sales of light commercial vehicles rose 8.6 per cent to 236,609 and SUV sales increased 5.6 per cent to 465,646.

w w w w w w w w w

“To have eight record months out of 12 in 2017 speaks volumes for how brands successfully placed new products and incentives into the market, which kept attracting buyers into the showrooms right through the year,” Mr Weber said. “Australian consumers recognise the value for money that is on offer in the new vehicle market.”

Luxury brands Rolls-Royce, Maserati, Bentley, Aston Martin and Ferrari enjoyed double-digit sales growth in 2017 while Holden, Ford and Hyundai sales fell about 4 per cent.

The sales figures, provided by the Federal Chamber of Automotive Industries, showed Japan was the biggest supplier of cars in Australia, followed by Thailand and Korea, which supplied 297,482 and 175,802, respectively.

The last three local car manufacturers — Ford, Holden and Toyota — produced 56,851 cars in Australia last year, down 35 per cent from 2016. Ford, which announced its exit from Australia in 2013, made only four cars here last month.

The three top-selling models last year were the Toyota HiLux for the second consecutive year, followed by the Ford Ranger and the Toyota Corolla.

“The outlook for 2018 car sales remains favourable, especially with further improvement expected in the job market and on the expectation that vehicle prices will remain super-affordable for buyers,” said Ryan Felsmann, a senior economist at the Commonwealth Bank.

The number of electric cars sold grew rapidly but from a low level.