Australia Autos Report Q4 2014 - New Market Report

Although July 2014 was second only to July 2013 in terms of all-time July sales records for Australian new vehicles, BMI believes that the near-term outlook for the industry remains clouded. In July, the country registered a slight 0.4% annual decline in new vehicle sales to 89,867 units, according to figures from the Australian Federal Chamber of Automotive Industries (FCAI). Year-to-date, the 7M14 sales figure was down 2.1% year-on-year (y-o-y), at 649,818 units.

Breaking down the headline 7M14 sales figure, there have been declines across passenger cars (-4.6%), light commercial vehicles (-5.3%) and heavy commercial vehicles (-4.3%). The one exception to the general market malaise remains the sports utility vehicle (SUV) segment, which has seen growth of 4.1% y-o-y. SUV sales totalled 204,244 units over the January to July period, now accounting for some 31.4% of the total market. In particular, it appears to be smaller SUVs that are finding favour with Australian consumers at the present time. Elsewhere, while business sales remain subdued (down 8.4% y-o-y year-to-date), government purchases were reportedly up 6.4% y-o-y over 7M13, according to the FCAI.

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BMI expects the near-term sales outlook to remain clouded by a variety of factors. On the commercial vehicle sales front, a continued drop in demand for commodities from China will impact heavily on the Australian mining sector, leading to greatly reduced demand for vehicles. We currently forecast a 3.7% contraction in commercial vehicle sales for the full year, with risks remaining to the downside. Turning to passenger vehicles, we retain our forecast for a decline of 1%, to 890,965 units.

Moving forward, there are indications that the sales outlook may be starting to improve slightly. On the back of Q114 figures that showed 1.1% GDP growth, BMI's Country Risk team has upgraded its full-year growth forecast to 2.3%. However, even this higher growth forecast remains below consensus , as we believe that the...

The Australia Autos Report features the latest data and forecasts covering production, sales, imports and exports.

Business Monitor International (BMI)'s Australia Autos Report provides industry professionals and strategists, corporate analysts, auto associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on the automotives market in Australia.

Key Benefits

* Benchmark BMI's independent automotives industry forecasts on Australia to test other views - a key input for successful budgetary and planning in the Australian automotives market.
* Target business opportunities and risks in the Australian automotives sector through our reviews of latest industry trends, regulatory changes and major deals, projects and investments in Australia.

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