New vehicle sales fell 6.9% in July: ABS

[Jason[98.EL]]

hope it is not to bad for ford ect


Taken from ninemsn

New motor vehicle sales posted their biggest monthly drop in more than eight years in July, after the winding back of a tax rebate for big business and waning effect of the federal government's cash handouts to consumers.Despite the big drop, economists say motor vehicle sales should still post at least modest growth for calendar 2009 because of the improving economic outlook.

New motor vehicle sales fell by 6.9 per cent, seasonally adjusted, to 75,006 units in July, from 80,559 units in June, the Australian Bureau of Statistics (ABS) said on Monday.

It was the biggest monthly drop since January 2001 when total vehicle sales fell by 18.5 per cent from a month earlier.

"The result in July was the worst result in eight and a half years, but the result in June was the best result in over four years, so I think you've seen a bit of a trade off," CommSec economist Savanth Sebastian said.

"The expiry of the government's tax rebate for big business at the end of June really has played havoc with the data."

The "other vehicles" category, which includes vans, trucks and buses, fell by 25.7 per cent in the month, to 14,785 in July from 19,890 a month earlier.

Businesses had until June 30 to purchase eligible new assets worth more than $10,000 to claim a 30 per cent tax deduction on their cost, provided they are installed and ready for use by June 30 next year.

Until December 31 this year, small businesses can claim a bonus tax deduction of 50 per cent on the cost of eligible new assets worth $1,000 and installed ready for use by December 31, 2010.

The incentives, unveiled in the federal budget in May, are in addition to the normal depreciation allowance for new vehicles and capital equipment.

Mr Sebastian said signs of an improving domestic economy - including indications of growing consumer confidence and a general improvement in the economic outlook - would see motor vehicle sales post a modest increase in sales by the end of calendar 2009.

"I think you've seen how the car industry has turned the corner, it has certainly been well supported by government stimulus," he said.

Sales of sports utility vehicles fell to 3.8 per cent to 15,379 in the month, while passenger vehicle sales were 0.4 per cent higher at 44,842 in July.

ICAP economist Adam Carr said the poor July result was not an indicator of the overall direction of the vehicle sales market.

"If you look at sales over the last three months, they're above the average of the previous 12," he said.

"As far as I can tell, given such a huge number of sales in June it only makes sense that we are selling less in July.

"I would expect to see ongoing robust growth in car sales over the next six to 12 months."

Westpac economists said the ABS motor vehicle sales data was a critical bellwether of consumer demand.

They said vehicle purchases were typically the most cyclical component of consumer spending.

"Demand usually falls sharply and early on in a downturn, as fears over job losses etc, prompt consumers to delay or cancel car buying plans," they said in a note.

Jason