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Car sales stall as rebound fails to appear

Holden VF Commodore SS sedan.

One swallow doesn't make a summer, as one bumper month for Commodore does not mean it's basking in sales sunshine. With 3315 buyers last month, the Commodore recorded its best month since September 2011 and came third in the sales table.

It's a surprisingly good result against a headwind of a 3.1 per cent decline in the market overall, as the expected rebound from a change of government failed to show. At least so far. The Federal Chamber of Automotive Industries believes changes to the fringe-benefits tax announced by Labor in July are still confusing potential buyers, despite being overturned by the Coalition.

That suggests the market can recover from its stall. The problem is, Commodore will need an extended heatwave to reverse the chill, much less give Holden a chance of retaining a viable manufacturing operation.

Since 2002, Commodore demand has slid by two-thirds. The decision to add the Cruze small car to the Adelaide plant was an admission that two models were needed to generate the volume that used to come from one. The assumption is this will mean producing 65,000 cars a year after 2016, all for domestic consumption. This is a climbdown from Holden's previous position that annual output of 90,000-100,000 was needed to keep Adelaide viable.

Neither target is a money-making proposition and with increasing fragmentation of the market, a more realistic target would be two cars in the top five. Even the low goal is wildly optimistic.

Cruze has failed to excite the market, peaking in its debut year as a local then tumbling 14 per cent last year and another 16 per cent this year. Commodore sales are down 14 per cent this year and last month's result needs some context -- as recently as 2011, it would have been one of the worst months, not the best.

Between them, they will be lucky to achieve 60,000 this year. Exports -- let's be generous and assume 15,000 -- will keep this year's production total respectable.

Now subtract exports and swap the Commodore with the Malibu, its scheduled replacement in 2016, and a car that has been ignored by buyers since its introduction as an import in June. If Commodore and Cruze can't cut it, then Malibu and Cruze are destined for the deep-freeze.