New-car sales bounce back in February

Australians are continuing to treat themselves to new cars as they cash in on low interest rates and sharp deals. But our taste in cars is changing.

As the Australian economy shows signs of slowing, sales of new cars got a boost in February – the first solid increase in five months – as dealers cleared last year's stock and buyers continued to cash-in on record low interest rates.

Deliveries of new cars rose by 4.2 per cent in February to 90,424, compared to the same month last year, figures from the Federal Chamber of Automotive Industries show.

Prior to last month, new-car sales had been stable or in slow decline for the better part of a year.

Discounts across most mainstream brands have been particularly aggressive in response to price cuts from Japanese marques after a new Free Trade Agreement

Private buyers – not business fleets – were the driving force, pushing sales up 6 per cent among those who pay for their own cars, and accounting for more than half of all new vehicles sold in the month.

The turnaround in car sales is likely due to a combination of low interest rates which have enabled many buyers to update to a brand-new model with the same – or lower – monthly repayments.

Furthermore, the discounts across most mainstream brands have been particularly aggressive in response to price cuts from Japanese marques after a new Free Trade Agreement axed the 5 per cent tariff on the landed wholesale cost of every vehicle from Japan.

The adjustment typically saw price cuts of between $300 and $900 on Japanese cars in the $15,000 to $40,000 price bracket.

For example, the Mazda3 price was trimmed from $20,490 to $19,980 and the Toyota Corolla hatch went from $19,990 to $19,490 plus on-road costs.

Sales to fleets were down by 3.0 per cent while government departments also had the handbrake on (down 0.5 per cent).

Sales to rental companies were much higher than average (up a staggering 59 per cent for the month), however this is more likely a sign that some brands "pushed" cars out at heavily discounted rates, rather than being indicative of a boost in tourism.

Seven of the Top 10 brands posted increases. But former market leaders Ford and Holden were hit hard – with sales declines of 20.1 per cent and 10.2 per cent respectively – as they adjusted to weakening demand for their locally-made vehicles in the lead-up to their factory closures in 2016 and 2017.

A sign of the times – and our changing taste in cars – luxury brand Mercedes-Benz rounded out the Top 10 for only the fourth time ever.

Most luxury marques continued to shine, with Audi (up 9.4 per cent), BMW (up 14.8 per cent) and Porsche (up 14 per cent) all posting increases that outpaced the overall market.

The Toyota Corolla overtook the Mazda3 to become the nation's top-seller

Prestige brands customarily account for 8 per cent of car sales globally; in Australia they make up more than 11 per cent of new vehicle deliveries.

Other highlights for the month of February: sales for small-car specialist Suzuki were up 20 per cent while ute and SUV specialist Isuzu was up by a massive 54 per cent.

Meanwhile the Toyota Corolla overtook the Mazda3 to become the nation's top-seller – but the Mazda3 still leads the sales race in the year-to-date tally by a narrow margin of just 90 cars.

The two small cars have been duking it out for Number One for the past four years after the Mazda3 ended the Holden's Commodore's record 15-year winning streak in 2011.

The Mazda3 went on to lead the new-car market for two years in a row, but was overtaken by the Toyota Corolla, the world's biggest selling car, in the two years that followed and is currently the reigning champion.

With no other challengers to Number One in sight, the year 2015 looks set to be a repeat of the past two years with the Toyota Corolla and Mazda3 battling for top-seller status.

Top 10 car brands in February

Toyota 16,243 – up 0.3 per cent
Mazda 9057 – down 1.2 per cent
Hyundai 8003 – 2.6 per cent
Holden 7809 – down 10.2 per cent
Mitsubishi 6242 – up 33.3 per cent
Ford 5022 – down 20.1 per cent
Volkswagen 4889 – up 11.7 per cent
Subaru 3223 – up 3.3 per cent
Honda 2901 – up 9.0 per cent
Mercedes-Benz 2744 – up 15.5 per cent

Top 10 vehicles in February

Toyota Corolla 3939 – up 18.2 per cent
Mazda3 3598 – down 9.3 per cent
Toyota HiLux 2861 – down 14.5 per cent
Holden Commodore 2517 – down 9.4 per cent
Hyundai i30 2126 – down 10.4 per cent
Mazda CX-5 2085 – up 19.0 per cent
Mitsubishi Triton 1988 – up 62 per cent
Ford Ranger 1953 – up 2.7 per cent
Toyota Camry 1767 – down 6.6 per cent
Volkswagen Golf 1735 – down 2.5 per cent

Source: Federal Chamber of Automotive Industries