CAR sales across Australia got off to a strong start in 2018, following a record year in 2017.
According to VFACTS, total reported motor vehicle sales grew by 0.9 per cent in 2017 to a record total of 1,189,116 units. More broadly, experts at Macquarie believe that growth will continue in 2018.
Jon Moodie, head of Macquarie Leasing Australia, said: “Looking at the big picture today, we’re in a relatively stable economy with low interest rates. In Macquarie economists’ view, there’s a slight chance the RBA might raise rates in the third quarter of the year at the very earliest, but there’s a possibility they’ll remain on hold this year. When rates do rise, it’ll likely be very gradual. The Australian dollar also looks to end the year around current levels,” he said.
Recent market volatility aside, the Australian economy seems set for a good year – with the caveat that economic conditions can change quickly.
“You’ve really got to keep an ear to the ground and make judgements based on the best information you have at that time. That said, most indications at this stage are positive.”
According to Mr Moodie, consumer confidence that had languished over the past few years is looking better. That confidence is being boosted by stronger labour market conditions.
“Wages growth in Australia has been weak in recent years, but appears to have stabilised. Emerging signs of slightly better wage growth might stir some who have put off upgrading their car to do so in 2018 – we’ll see,” Mr Moodie said.
Economic factors aside, Australian Securities and Investments Commission (ASIC) new flex-commission regulations will take effect this November 1. In January’s edition of GoAutoNews Premium, Macquarie’s Russell Bryant commented that Macquarie Leasing was working to support dealers in preparing for the changes.
“As Russell said, we have a huge pool of experts and data to draw on. We’re using that to support our dealers, so they can prepare for ASIC’s reforms and make the most of the opportunities to improve both their processes and the experience they deliver to end customers,” Mr Moodie said.
Macquarie believes that, on balance, most dealerships should have another successful year. The scale of that success – within the context of the current economic climate and regulatory change – will depend on their ability to prepare for, and adapt to, change.
“With change comes opportunity,” Mr Moodie said. “We’re helping the dealerships we work with and their customers to seize that.”
By John Mellor