Australia Auto Crash on Top of Housing Crash

New car sales in Australia are down for the sixth consecutive month. The real numbers are worse.

News AU reports New-Car Sales Hit the Brakes for the Sixth Month in September.

Here's the punchline: Dealers report the downturn is sharper than what the reported sales figures show.

> Official figures show new-car sales hit the brakes for the sixth month in a row in September.

> The slowdown means dealers are overstocked as they head into the quietest months on the calendar and trying to clear end-of-year models.

> September’s downturn of 5.5 per cent over the same month last year — to 94,711 reported sales — doesn’t tell the full story. Dealers claim the figures are inflated and the real position is much worse.

> One major metropolitan dealer says “there was a mad scramble” in the last days of the month to report cars as sold. Industry insiders say anywhere from 10 to 20 per cent of vehicles in a given month are “cyber cars”, a term given to vehicles counted as sold on a computer but not in the real world.

Congratulations to Australia

It appears they can lie at least as good down under as we do in the US.

Mike "Mish" Shedlock

Comments
No. 1-5
TheLege
TheLege

The interesting thing is that the 2nd hand car market still hasn't cracked yet. Once it does, lease rates will head much higher, putting a further nail in the coffin of the new car market. These numbers are even more worrying given that immigration into Australia is red hot at the moment (and has been for a long while) -- all these people need a roof over their heads and many require some wheels.

BoneIdle
BoneIdle

I was in my Aussie bank (one of the big 4) just this past Friday sorting out some business. My normal representative has been relocated. His official title was Lending manager. There were three lending managers in this branch a year ago - now there is one. The one solitary lending manager told me he had set up two house mortgages this week . A year ago the three lending managers would have set up 40 - 50 house mortgages per week. He offered me Housing mortgage finance at 3.2% (pretty low rate for Australia) for the first two years. He claimed the bank was just on the line of losing money on that rate.

He also claimed that the other banks in the area were equally having a bad time getting housing mortgages written up.

He is predicting some volatility early next year.

2banana
2banana

The cheap and easy debt tide is rolling out...

So many swimmers naked!

Kinuachdrach
Kinuachdrach

This is actually bad news for Japan -- since Australia's auto-building industry has already been offshored. Outside of Australia's retail sector, the impact of this decline will mainly be felt in exporting countries.

Six000mileyear
Six000mileyear

It's difficult to get a loan for a car if you are struggling to pay your mortgage.

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