New car sales figures released for the month of April represent the lowest number of cars sold in a month in 26 years and the biggest monthly decline on record.
Less than 40,000 cars were sold in April representing a fall of 48.5 per cent over the same period last year and the biggest monthly contraction since new car sales figures were first recorded in 1991.
“Although we were expecting a very poor month, the extent of this decline in sales is still alarming,” AADA CEO James Voortman said.
“The COVID-19 related restrictions and associated economic anxiety have combined to send the sales of new vehicles off a cliff,” he said.
“The effect of these figures on the wider economy should not be underestimated. Passenger cars is Australia’s third biggest import; the industry contributes almost $13 billion to the economy; and dealerships employ nearly 60,000 jobs in cities and country towns across the nation,” Mr Voortman said.
“Outside of dealerships, new car sales support so many businesses ranging from those involved in shipping and distribution of cars, finance and insurance products, aftermarket accessories, servicing and repair, and many more,” he said.
“We are hopeful that April represents the bottom of this downturn, but it would be foolish to ignore some of the headwinds facing the economy and its vital that industry and governments start working together on considering ways to assist the recovery of this industry,” Mr Voortman said.
The AADA has developed a number of measures for the Government to consider to assist the automotive industry in its recovery.
“The $150,000 instant asset write-off should be extended beyond 30 June and the Government should remove the car limit that currently applies to this initiative. There is simply no rationale for treating cars differently to other assets,” Mr Voortman said.
“The Government should also consider ways to incentivise the renewal of our fleet, assisting the uptake of newer, safer and lower emitting cars,” he said.
“We need to address the tightening of credit brought on by the royal commission and compounded by the COVID-19 crisis. If credit is not freed up, this recovery will not happen,” he said.
“The various taxes applied on cars at the federal and state levels need to be urgently reviewed,” Mr Voortman said.
“Finally, the Government’s current work to provide a degree of balance between automotive Manufacturers and Dealers needs to ensure that Dealers are effectively protected in their future franchising relationships,” he said.