Car sales braking in March

Car makers will be talking to dealers, seeking signs that interest rate rises and share market jitters are affecting showroom traffic.

With fewer selling days this month because of Easter, and some dealers reporting a drop in buyer interest last weekend, March may be the first month to show that the brakes have been applied to car sales when the figures are released at the end of next week.

This year began at the same hectic pace it finished 2007, with January and February both record months and growth still running hot at 7.2 per cent.

“But Easter takes a bit of steam out of it,” said Tony Robinson of fleet risk management company Sureplan.

“March and April will be a litmus test of what impact the interest rate increases have had on private buyers.”

The Westpac-Melbourne Institute measure of consumer sentiment for March fell to its lowest in seven years and the time-to-buy-a-car index slumped by 22.5 per cent — its worst drop in more than a decade.

Mr Robinson said segments already suffering would be hardest hit. “The large car is under siege and there's a slight drying up on the larger commercial vehicles, especially among fleets.”

The Ford Falcon is in run-out mode ahead of the new FG model going on sale next month, and wagon sales are missing from the Holden Commodore figures as it waits for the VE Sportwagon to join the line-up.

It is a mixed picture. With buyers shunning large sedans for SUVs, the category is running 23 per cent up year-to-date.

Mr Robinson said most importers were reporting a strong start to the year, fleet orders were not drying up and it was too early to be writing off 2008.

“We're still going to have a strong year, but we'll see some levelling off or even a marginal drop in sales.”

BMW spokesman Toni Andreevski said Easter was typically quiet “but overall for March we'll be up on last year.”