Car sales tipped to rise in 2012

The sales total for the coming year is already forecast to top the one-million mark reached in 2011 after a 5.9 per cent lift in Roy Morgan Research returns.

A total of 648,000 people are planning a new-car purchase in the next 12 months, says Morgan in the Car Buying Intention report released today, well up from the short-term average of 612,000 that has driven recent demand.

"In relative terms, cars are now very cheap. As long as this continues, and interest rates remain low, we see new cars as being a very popular choice over the next four years at least," says Norman Morris, communications director of Roy Morgan.

The company's prediction comes as the Reserve Bank holds steady on interest rates and consumer confidence, as measured by Morgan and the Westpac Melbourne Institute rises.

Confidence is now at a solid 117 points, compared to the most recent high of 130 in 2009. Even though the confidence is not reflected in housing starts, Morris says the trend for new car sales is up.

Surprisingly, he predicts that Ford - which has been badly hit by falling sales of its locally-made Falcon - will be a big winner together with Volkswagen and Toyota, which has dominated car sales for more than a decade.

"Ford's Fiesta and Focus, for example, are seen as fresh products that people want to own," said Morris. "There's also more product coming from Ford. In general, I'd say there's more happening at Ford and that's attracting buyer interest "Volkswagen, similarly, has a range of new models and has recorded strong growth in 2011."

The report notes that sales of SUVs is continuing to strengthen at the expense of the medium-sized, large car and sports car segments. "SUVs are seen as flexible and versatile rivals to traditional sedans. Plus, there's so many models for the buyer to choose."