Used car registrations plunge in June

Wednesday, 02 July 2008
(Source - Stuff)

Used car registrations- generally for imported used cars -- plunged 30 per cent in June to 7049 from a year ago, Land Transport New Zealand said today.

Used car sales were down 5.5 per cent on the 8156 sold in May.

Sales have been reeling as a result of soaring petrol prices, restricted credit available and a generally weak economy.

Used car sales have been heavily affected by a crisis in the finance company industry that has seen 23 company defaults in just over two years.

Finance companies are a traditional source of credit for used car dealers.

In contrast to the dire state of the used car market, new car registrations rose 5.5 per cent on June last year and were up 20 per cent on May to 6753.

But the figures show a marked move toward smaller cars, away from larger gas guzzlers.

Today's data comes as new figures from the US show auto sales plunged in June to a 15-year low as consumers reacted to a market still flooded with traditional US gas-guzzlers.

Here, new commercial vehicle registrations during the month rose 46 per cent from May to 2823 and 11.6 per cent up from June 2007, despite the seemingly depressed economy and low business confidence.

The top selling local make of new cars in June was Toyota with 1378, followed by Ford with 770 and Holden with 565.

Sales of new Toyotas, which sells mainly less thirsty smaller and medium-sized cars, were up 28 per cent on last year while sales for Holden, which mainly sells larger vehicles, were down 23 per cent.

In the US, only a month-end clearance sale helped General Motors retain its No 1 spot and steer clear of the wipeout many had feared.

Record petrol prices and declining trade-in values for big trucks and SUVs hit truck sales hard while major automakers, including Toyota, struggled to keep up with demand for some popular smaller cars and hybrids.

GM was the industry's main surprise after a sale featuring free financing for six years allowed the US automaker to avoid losing sales leadership in the month to Toyota.

In a reversal of recent trends, Toyota trailed GM in June with a 21 per cent sales decline, reflecting a 31 per cent drop in sales of its trucks like the Tundra pickup.

Equally damaging, sales of Toyota's hybrids including the market-leading Prius hybrid dropped 27 per cent as dealer inventory ran short of demand.

Ford Motor Co sales were down 28 per cent, while Chrysler LLC sales fell 36 per cent, the weakest result in the industry. Now controlled by Cerberus Capital Management, the privately held automaker relied on light trucks for almost 70 per cent of its sales.

By contrast, Honda, which boasts the most fuel-efficient vehicle line-up among major automakers, bucked the downturn and posted a 1 per cent sales gain.

Sales for Nissan Motor Co dropped 18 per cent.

The US sales rate for light vehicles dropped to 13.6 million units on an annualised and seasonally adjusted basis, down from 15.7 million a year earlier, according to tracking firm Autodata Corp. It was the weakest month since August 1993.

Most analysts and major automakers now expect full-year US sales to end up near 15 million units, down from 16.15 million in 2007 because of the devastated US housing market, high gas prices and weak consumer confidence.

George Magliano, an analyst with Global Insight, said he saw no sign that the US, largest market in the world for cars and light trucks, had hit bottom in June.

He said that although overall sales had topped the most bearish expectations, "they are still disappointing and disconcerting".

"The bottom line is the selling rate in June is weaker than May, and May was not a good month," he said.

Ford's marketing chief Jim Farley pointed out that consumer fundamentals and confidence had deteriorated in the first half of the year and added, "The economy enters the second half of the year with a notable absence of momentum and a high degree of uncertainty."

- NZPA

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