The RAM 1500 starts at $80,000.
The RAM 1500 starts at $80,000.

Chinese cars enjoy boost in market during outbreak

Chinese-built vehicles defied a huge COVID-19-inspired slump in new-car sales last month.

In a month where the market was down by more than a third, sales of Chinese-built vehicles bucked the downward trend, registering a 2 per cent increase compared with last May. In contrast, sales of Korean-built cars halved and Japanese-built vehicles were down by a third.

The industry staged a recovery of sorts in May, recording a 35.3 per cent drop in sales, compared with a 48.5 per cent decline in April.

Sales of Chinese brand MG have continued to grow strongly through the COVID-19 crisis. Taken by Thomas Wielecki
Sales of Chinese brand MG have continued to grow strongly through the COVID-19 crisis. Taken by Thomas Wielecki

While passenger car and SUV sales slumped, utes and vans weathered the storm better, thanks to the Federal Government's instant asset write-off stimulus package, which offered big tax breaks on purchases of work vehicles.

Sales of the massive American-built RAM pick-up, which retails for between $80,000 and $120,000, were up by more than 40 per cent, while the 4WD version of the top-selling Toyota HiLux recorded a drop of just 10.7 per cent. Sales of Toyota's LandCruiser 4WD also remained solid, suggesting farmers are taking advantage of the tax breaks.

Sales of big American RAM trucks are also selling well during the past few months.
Sales of big American RAM trucks are also selling well during the past few months.

Overall, the result was the biggest downturn in May sales since records began.

Nevertheless, car companies are cautiously optimistic of a recovery this month, which is typically the biggest on the calendar due to the traditional end-of-financial-year sales.

Market leader Toyota reports "a steady increase in sales over the past two weeks", while Subaru says there are "definitely positive signs for the market". Kia says "business is improving by the week".

Tony Weber, chief executive of the FCAI, said that while COVID-19 had "a devastating effect" on sales in the past three months, the reality was the automotive market had been under been under pressure for some time.

Toyota LandCrusier sales have been resilient during the pandemic.
Toyota LandCrusier sales have been resilient during the pandemic.

"May 2020 is the 26th consecutive month of negative growth for the market, and the

causative factors are well documented - droughts, floods, bushfires, tight lending

conditions, unfavourable exchange rates and political uncertainty," Mr Weber said.

Mr Weber called on the Federal Government to extend the Instant Asset Write Off package beyond its June 30 deadline.

"The Instant Asset Write Off initiative has real potential to help stimulate the market,

and we would like to see it extended in its current form beyond 30th June 2020," Mr

Weber said.

He said the industry was beginning to see some "green shoots" in the marketplace as lockdown restrictions ease.

Extending the $150,000 instant asset write-off would further boost ute sales. Photos: Mark Bean.
Extending the $150,000 instant asset write-off would further boost ute sales. Photos: Mark Bean.

"With people venturing out a little more, dealers have advised of a slight uptick in floor

traffic through dealerships," he said. Website traffic had also increased.

Toyota has weathered the COVID-19 storm better than most, recording a drop of just 23.1 per cent. Its closest rivals, Mazda and Hyundai, posted drops of 34 and 49 per cent respectively. Four of the top five selling vehicles were Toyotas.

Victoria (down 41.2 per cent) fared worse than New South Wales (34.6 per cent) and Queensland (33.1 per cent), potentially due to that State's more stringent lockdown laws - and more rigorous policing.

Victorian dealers reported customers being stopped and sent home on their way to buy vehicles or have them serviced, despite the fact that it was legal to do so.

Western Australia suffered the smallest decline at just 26.4 per cent.

Private buyers were more active than business buyers during May, while Government sales dropped by only 16.4 per cent.

June should see a further strengthening of sales as buyers take advantage of the traditional end of financial year sales and businesses rush to access the tax write-off before June 30.

However, lending remains tight and dealers are reporting that some customers are finding it hard to get finance approved. Some institutions are reportedly refusing credit to anyone on the Job Keeper scheme, as well as those who have dipped into their superannuation early.

The Toyota HiLux remains the country's most popular vehicle, followed by the Ford Ranger and Toyota's RAV4, LandCruiser and Corolla.

Top 10 selling vehicles May 2020

Toyota HiLux - 3527

Ford Ranger - 2663

Toyota RAV4 - 2345

Toyota LandCruiser - 2132

Toyota Corolla - 1626

Mazda CX-5 - 1479

Toyota Prado - 1358

Hyundai i30 - 1191

Mazda3 - 1052

Hyundai Tucson - 1019

Top 10 selling brands May 2020

Toyota - 14,466

Mazda - 5661

Hyundai - 4109

Ford - 3894

Mitsubishi - 3010

Volkswagen - 2781

Kia - 2760

Nissan - 2216

Subaru - 2023

BMW - 2013

Originally published as How Chinese cars saw a boost in COVID-19 outbreak



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