Australia’s new motor vehicles sales rise slightly in December, likely to remain elevated in near term

Australia’s new motor vehicles sales rose slightly in December after falling for two straight months. Sales grew just 0.3 percent on a sequential basis. Meanwhile, on a year-on-year basis, sales rose just 0.2 percent, but 2016 registered a record sales of 11,176,574 units, noted St George Economics in a research report. In the month of November, new vehicle sales had dropped 0.7 percent sequentially and 1.1 percent year-on-year.

Among the several segments, there were rises in passenger vehicles, which saw a growth of 3.6 percent, and sales of ‘other’ vehicles, including utes, buses and trucks in December. SUVs sales dropped 3.3 percent in December. Meanwhile, passenger car sales shrank 4.2 percent year-on-year, while SUVs remained flat. However, other vehicles sales rose at an annual pace of 10 percent that is suggestive of moderate expansion in economic activity, stated St George Economics.

Results came in mixed throughout different territories and states. There was modest annual growth in South Australia and in NSW. In the Northern Territory, sales came in slightly higher as compared with one year ago, while car sales in the ACT rose sharply by 16.6 percent in 2016, reflecting solid sales growth in recent months. Other States witnessed contractions in the year, including resource States WA and Queensland. Tasmania and Victoria also saw drops in sales in the year.

New motor vehicle sales in Australia are indicating towards ongoing modest economic activity; however, the data released today shows little indication of a rebound in consumer spending in the end of 2016.

“We expect sales to remain elevated which will continue to be supported by low interest rates and moderate employment growth, however, a more substantial pace of growth does not appear to be in prospect while wage growth remains subdued”, added St George Economics.

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