Australia’s new motor vehicles sales fall in November, but likely to remain elevated

Australia’s new motor vehicles sales dropped for the second straight month in November; however, the sales stay at historically high levels. New motor vehicle sales dropped 0.6 percent in sequential terms in November, and 1.1 percent year-on-year. However, not all segments of the market fell in November.

Sales of ‘other’ vehicles, which include utes, buses and trucks, were up 4.6 percent to reverse the 4.3 percent decline seen in October. Sales of ‘other’ vehicles are an indicator of economic activity and business conditions in the Australian economy, stated St George Economics in a research report. Over the year to November, sales of ‘other’ vehicles have grown 3 percent. Even if it is moderately healthy, it is down from the 14.6 percent growth witnessed in the year to September.

SUV sales have been steadily increasing since the mid-1990a and are close to overtaking sales of passenger vehicles. SUV sales in November dropped 3.1 percent in sequential terms, but rose 3.8 percent year-on-year. Given the present trend, it appears to be just a matter of time before sales of SUVs exceed those of passenger vehicles. Sales of passenger vehicles dropped 0.8 percent in November dropped 7.2 percent year-on-year.

Region wise, there was considerable variation in vehicles sales throughout the State and Territories over the year to November. In Tasmania, Victoria, the Northern Territory, the ACT and in South Australia, the growth in new vehicle came in strong. Meanwhile, it dropped in WA and weakened in NSW and in Queensland.

In spite of a fall in November, new motor vehicle sales stay at an elevated level. With ongoing population growth, stable jobs growth and reasonable business conditions, new motor vehicle sales are expected to stay elevated, although growth rates would differ between regions, according to St George Economics.

At 05:00 GMT the FxWirePro's Hourly Strength Index of Australian Dollar was bullish at 81.248, while the FxWirePro's Hourly Strength Index of US Dollar was bearish at -77.9724. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex