Australia’s car industry has just suffered its 24th consecutive month of falling sales. Only during the GFC in March 2009 were new car sales lower than in March 2020. The end of Holden is just one symptom of the malaise. Until things turn around, right now may be a very good time to buy a car.
The top four new vehicles we bought in March 2020 were Toyota Hi-Lux, Ford Ranger, Toyota RAV4 (thanks to the hybrid version) and Toyota Corolla. Clearly Toyota is doing something right. In fact, Toyota’s market share rose from 18.5% as at March 2019 to 21.5% as at March 2020. Second and third market leaders, Mazda and Mitsubishi, both lost market share during that year.
The second most popular brand was Mazda, but its sales were still only 40% of Toyota’s. Meanwhile Kia’s sales in fourth place eclipsed its parent, Hyundai, for the first time. Three other brands had a good month, including MG, Ram Trucks with right-hand-drive, and Chinese marque, Haval.
Of course, not everybody wants to buy a brand new car. Carsales says used car sales are usually 2.5 to 3 times higher than new car sales. Car auction house Manheim claims:
- 1% fall in consumer confidence means used car prices fall 3%
- 1% increase in unemployment means used car prices fall 3.5%.
For those who prefer a used car, there may not be a better time to buy.
The question now is whether to visit dealerships, which are still open for business, or whether to buy online.
“Digital comes first, the showroom comes last”
In May 2018, Budget Direct claimed three quarters of Australians prefer to buy cars in person. Only a third of men, compared to a fifth of women, were willing to buy online. That was two years ago and a long time in the car world. More and more car brands are selling online and, thanks to coronavirus, more people may want to buy online.
Experts seem convinced digital comes first while the showroom takes a back seat. There are signs they may be right:
- Hyundai’s new online system, Click to buy, allows buyers to select a vehicle and accessories to get the estimated driveaway price. They can still negotiate with the selling dealer.
- Volkswagen buyers can now get the entire car range online. Buyers pay $500 deposit on a model, then the designated dealership contacts buyers within 2 days to complete the process
- BMW is developing a fully online purchasing system
- Toyota already sells and finances cars online and takes about 50 online financial quotes a day.
For people who don’t mind paying 1.5% commission for convenience, there is also carconnect.com.au. The buyer says exactly what kind of vehicle they want, dealers submit their prices, and the winning dealer delivers the car to your door.
As greenslips.com.au has said in the past, many people usually prefer the human touch even if they currently do not. Dealerships are still open, but you can increasingly do your car shopping from home.