Luxury Car Slump Cuts A Slice Out Of Tax Take

The Age

Wednesday October 8, 2008

Ian Porter

ANOTHER weak month of luxury-car sales has left the Federal Government's revenue projections for the increased luxury-car tax well behind target as new-vehicle registrations continued to fall in September. Higher interest rates and the economic slowdown have undermined consumer confidence in the past three months and led to lower sales in most market segments, according to the latest registration figures.

"Luxury-car sales over the last three months are down 12.5%," said Andrew McKellar, chief executive officer of the Federal Chamber of Automotive Industries, which publishes VFACTS registration figures.

Mr McKellar said luxury-vehicle sales were falling more than twice as fast as overall sales.

"We believe sale of luxury vehicles will be down by between 12% and 15% in the second half of 2008," he said.

The Government forecast a 29% increase in revenue to about $130million from the rise in the luxury-car tax in this financial year but that was based on the assumption that luxury-vehicle sales would stay the same.

"If current trends are maintained to the end of the financial year, the best case would be the Government would miss a third to a half of the extra revenue," MrMcKellar said.

September sales were down 6.8% on the previous September as the economic conditions continued to suck the wind out of sales.

Only the small and medium-car segments were up in September, although the light-car sector was down largely because a strike in Korea plunged sales of the Hyundai Getz from about 1700 in August to 1070 in September.

The weakening consumer confidence probably reflected the recent interest rate rises and the instability on world financial markets, said Richard Johns of Australian Automotive Intelligence. "(Car buyers) can see the value of their superannuation falling, the value of their houses falling, but whether it has translated into fears about their jobs, I am not sure," hesaid.

Small cars Toyota Corolla and Mazda3 again placed second and third on the list of best sellers but could not catch the market-leading Holden Commodore, which was strengthened by the recent release of the Sportwagon version.

It was also a good month for Ford's Falcon, sales of which jumped 16% in September to cement its position in fourth place.

Toyota still dominates the market with a share of 22.4% after nine months, Holden is second with 13.1% and Ford third with 11.0%. Then follow Mazda (9.1%), Nissan (5.7%), Mitsubishi (5.4%) and Honda(4.9%). -- IAN PORTER

© 2008 The Age

Back to News Index | Back to Home