World Car Sales do a Covid-19 Nosedive – Enthusiast Motor Insurance

June 16th, 2020

If you are still driving in 20 years’ time and a car manufactured back in 2020 takes your fancy, finding one might be a big ask. When the Pandemic went global during March of this year, among the first areas to be significantly affected were travel and transport.

The latter was marked by a huge decline in car manufacturing as factories across the world slammed their doors shut. This was not just because they wanted to protect their workers from the possibility of infection. Supply chains involving parts supply from China and other Asian nations stalled, leaving cars sitting half-finished on production lines and waiting months for parts to arrive.

Production schedules were simply torn up and an estimated three million vehicles will just not be built during 2020 and well into next year. Demand has plunged as well, with some parts of Europe reporting declines in new vehicle registrations for April/May of over 80 percent.

People everywhere haven’t been using their cars as often either, leading to plunges in the oil price (and cheaper petrol) plus reduced revenue for toll road operators and governments.

Car dealers in many Northern Hemisphere countries, even those with stock in their holding yards, moved quickly to close retail divisions. Some would also shut service departments, leaving owners experiencing quite minor problems to also do without their cars.

Most Australian dealers kept both the sales and service sides of their business open, however activity was hampered by changes to vehicle financing criteria and, in some cases, stock shortages.

National sales statistics supplied by industry statisticians VFACTS showed for April 2020 an appalling 48.5 percent decline against the same period of 2019. The fall during May of 35.3 percent was slightly less horrific and reflected the way buyers and dealers were adapting to a new selling environment.

With restrictions on movement and work activities easing during June, the final month of the Financial Year will still show a sales decline but one that is less disastrous than during preceding months. Vehicles under lease are due to be replaced and tax incentives will also help promote sales, however dealers are worried by what may happen beyond July.

Major players such as Toyota, Mazda and Hyundai have maintained their positions within the list of Top Ten national brands while suffering varying degrees of sales decline. Toyota maintained top spot by a considerable margin and, having 2800 sold during the month, the brand’s Hilux 4WD remained Australia’s biggest-selling individual model.

With demand for new rental fleet vehicles down due to bans on aircraft movement, sales of passenger cars and Small/Medium SUVs plummeted. Existing fleet vehicles are having their lives extended and aren’t reaching the used market which will have an impact on availability and pricing later this year.

Ford’s US-sourced Mustang remains the class leader in its Sports Under $80,000 category and although sales are down by almost half when compared with 2019, more than 250 new Mustangs still found owners during May. BMW was one of few brands to maintain its volume, with 2013 May 2020 deliveries against 2052 for the same month last year.  Audi managed a similar result as did Porsche but Mercedes-Benz’ passenger vehicle sales plunged 32 percent.

No one however was going to match the sales collapse exhibited by Holden. Having announced earlier this year a complete withdrawal from Australia, the once-proud brand was selling cars at cost or below and still managing monthly sales during May that were 62 percent below 2019 levels.

If you can avoid pleading for finance, then there are plenty of deals and big saving to be made on new cars. If the one you buy is going to travel minimal distance, then be sure to consult Enthusiast Motor for an insurance quote. No matter what age a vehicle is, if it isn’t exposed to risks on a regular basis you will save money by insuring with Enthusiast.

For a Drive Less…Spend Less quote and to arrange immediate cover with fee-free monthly payments, visit the website or phone a Customer Service team member on 1800 10 10 44.