Australia June 2020: Tax incentives thin loss to -6.4%, Mercedes, Lexus, Hilux, Ranger and U.S. pickups hit records
Exclusive data show record Chevrolet Silverado sales in Australia. Picture carsales.com.au
9/07 update: Now with Top 48 All-brands and Top 305 All-models.
Lockdown easing, pent-up demand and strong end-of-financial year (EOFY) incentives have combined to deliver a much better June result than expected in Australia with sales down just -6.4% year-on-year to 110.234 units. Even though this is still the lowest June volume since 2011 (96.157) and a scathing 27th consecutive year-on-year decline, it’s a drastic improvement on the previous months when March (-17.9%), April (-48.5%) and May (-35.3%) all fell to decades-long lows. And this is occurring during what is traditionally the strongest month of the year which is a welcome boost for YTD tallies, now down -20.2% to 442.415 units. This is the lowest First Half volume in Australia in 17 years: since 2003 (443.203), yet partly because June was that strong, we at BSCB now forecast a 2020 Australian volume down -16% to 897.000 units (vs. -21% last month). This forecast integrates the new Victoria statewide-lockdown (July 8 – August 12) triggered by the recent cases spike in Melbourne, as well as potential pickup stock shortage over the coming months due to stronger-than-expected June sales. That level would be the lowest annual volume in Australia in 18 years: since 2002 (824.309).
Mercedes posts an all-time volume record in Australia in June…(picture carsguide.com.au)
One main element explains the sustained June volume: the Federal Government’s $150.000 instant asset write-off scheme. Its limit was raised to encourage spending, and even though it was also extended until the end of 2020 in an attempt to jump-start the economy, many companies have used it to reduce their taxable income before the 2019-2020 Financial Year ended on June 30. In layman terms, it means tradespeople and business owners can claim the purchase of a car as a business expense and receive the full deduction on their taxable income this financial year rather than spreading its depreciation over several years, resulting in significantly lower taxes. In most cases, the instant asset write-off applies to motor vehicles valued up to $57,581 and this has shaped the stricture of the Australian market in June: fleet sales are up 6.3% year-on-year to 48.517 whereas private sales drop -7.9% to 52.641, government sales are off -16% to 2.536 and rental sales sink -75.7% to 1.918 as tourism was thwarted by closed international and most state borders.
…as does Lexus…
Another instant asset write-off impact: light commercials are up 8.6% to 28.645 and 26% share vs. 22.4% in June 2019 and 21.7% in June 2018. SUV sales edge down -3% to 51.921 and 47.1% share vs. 45.4% a year ago and passenger cars as usual absorb the only market share loss, going from 31.9% in June 2018 to 28.7% in June 2019 and 22.7% this month as volumes skid -26.1% to 25.036. Volumes improve year-on-year in 3 States and territories: ACT (Canberra) up 13.6% still due to replacement vehicles in the wake of a particularly destructive hail storm earlier in 2020, South Australia (+3.6%) and Western Australia (+3.2%). Embroiled in a Covid-19 resurgence and partial lockdowns since July 1, new car sales in Victoria dive -13.6% or 4.622 units compared to June 2019. Looking at the source of imports, the most popular are Japan (-8%) at 32.469, Thailand (-12.7%) at 28.070, South Korea (-21.2%) at 13.657, Germany (-6.4%) at 8.680, the U.S. (+16.1%) at 4.824 and China surging 38.6% to 3.029.
Although the Top 10 brands remain unchanged on May, year-on-year variations are wildly different. Toyota (+7.9%) continues to buck the trend with a sturdy year-on-year gain leading to 20.7% share, well ahead of Mazda (-12.8%) at 8.5% and Hyundai (-22.6%) at 7%. Ford (+6.6%) also takes advantage of strong pickup sales to post a year-on-year gain ahead of Mitsubishi (-16.6%), Volkswagen (-1%) and an unusually weak Kia (-20.5%). Cancelled overseas holidays for 2020 have proven a goldmine for luxury brands with wealthy buyers splurging on a new car instead: Mercedes surges 34.1% to hit an all-time record monthly volume at 5.433 units, Lexus (+60.8%) also scores a sales record at 1.560 while Audi (+84.6%), Lotus (+42.95), Volvo (+40%), Mini (+39.5%), BMW (+32%), Porsche (+13.8%) and Bentley (+8.7%) also show insolent health.
Large U.S. pickups, remanufactured in right-hand-drive to factory standards by the Walkinshaw Automotive Group in Melbourne, also sport volume records this month: Ram (+130.5%) sell 604 units including 429 1500 Laramie (+171.5%) and 173 1500 Express (+101.2%) and the Chevrolet Silverado sells an all-time high 237 units according to exclusive data obtained by local outlet CarAdvice.com.au. A number of smaller independent companies that convert the Ford F-150, Toyota Tundra and Nissan Titan also reported strong sales in June while Jeep (+7.1%) is helped by the success of the newly launched Gladiator pickup (#152). At the other end of the scale, 3 Chinese carmakers break their all-time volume records thanks to spectacular year-on-year upticks: MG (+32.9%) at 1.348, LDV (+31%) at 1.052 – it also celebrated its 20.000 Australian sales in June and Haval (+99.5%) at 371. For its part Great Wall (+33.5%) is at its highest in 6 years: since June 2014 at 243 sales vs. 262 units then.
…both the Toyota Hilux and Ford Ranger (picture unsealed4x4.com.au)…
It’s a pickup landslide in the models ranking: the Toyota Hilux celebrates 32 connective months as the best-selling vehicle in Australia and soars 21.1% year-on-year to smash its all-time volume record at 6.537, eclipsing its previous best of 5.787 in June 2018. This is only the fourth time in history the Hilux surpasses 5.000 monthly sales alongside 5.396 in June 2019 and 5.461 in June 2017. The Hilux is at 5.9% share, the same as last month and only beaten by the 6% it hit in April. The Ford Ranger (+9.9%) also breaks its all-time volume record to 5.329 for its 2nd time only above 5.000 sales after June 2017 (5.051). The Ranger and Hilux also break records when only taking into account 4×4 variants at 5.092 (+15.8%) and 4.811 (+23.6%) respectively, which means the Ranger 4×4 slides back above the Hilux 4×4 year-to-date at 17.406 vs. 17.276 in an epic battle. At #3, the Toyota Corolla (-4.1%) remains the best-selling passenger car and the only one inside the Top 7, resisting disproportionately better than its followers the Hyundai i30 (-29.2%) at #8 and the Kia Cerato (-28.8%) at #10.
…and the Toyota Land Cruiser Ute (Picture 4×4.com.au).
The Toyota RAV4 (+7.5%) dominates the SUV charts again, even managing a year-on-year gain thanks to the new generation, distancing the Mazda CX-5 (-13.1%) just as the Toyota Prado (+16.1%) continues to benefit from closed borders and the prospect of 2020 holidays road tripping at home. Outside the Top 10, “utes” (Australian slang for pickup) are the heroes once again with the Mazda BT-50 (+31.4%) up to a record 11th place (previous best #14 in July 2015), the Toyota Land Cruiser Ute (+39.2%) breaking its volume record at 1.388, the VW Amarok (+9.7%) breaking both ranking (#26) and volume records (1.229) and the LDV T60 (+35.8%) doing the same at #47 with 618 sales. The Lexus NX (+199.6%), BMW 3 Series (+65.5%), Mercedes A-Class (+44.9%), MG3 (+35.7%), Toyota C-HR (+29.6%), Mercedes GLC (+24.3%), Toyota Kluger (+14.6%), VW Tiguan (+13.5%) and Land Cruiser (+11.6%) also impress in the Top 50. The Mazda CX-30 (#39) tops recent launches ahead of the Kia Seltos (#48), Hyundai Venue (#79), VW T-Cross (#80), MG HS (#84) and BMW 2 Series Gran Coupe (#93). This month we welcome the Mercedes GLB (#106) and Mitsubishi Express (#125), a rebadged Renault Trafic.
Previous month: Australia May 2020: Toyota (-23.1%), BMW (-1.9%), MG (+14.5%) hold in lowest May score in 26 years (-35.3%)
One year ago: Australia June 2019: Kia (+1.9%) the only island of growth in 15th straight market loss (-9.6%)
Full June 2020 Top 48 All-brands and Top 305 All-models below.