Aussie car industry in better shape than US, says report

Holden's Commodore is still the top selling car in Australia. Photo / Supplied

SYDNEY - The Australian car industry weathered the global financial crisis better than its US counterpart because of the government stimulus and low interest rates, a report shows.

New vehicle sales in Australia fell 7.4 per cent to 937,328 units in calendar 2009, much less than the 20 per cent drop in the US, the 2010 Deloitte Motor Industry Overview found.

The average car dealer made a two per cent profit on sales, above the previous year's one to 1.4 per cent profit. The top 30 dealers made a 3 per cent profit, better than their usual 2 per cent to 2.5 per cent profit on sales.

The report attributes the doubling of bottom lines for many dealerships to the government stimulus package, low interest rates, tax incentives, a shortage of vehicle supply and good business practices.

Deloitte Motor Industry Services partner Danny Rezek said 2009 was a remarkable year for the Australian car sales industry but challenges remained in 2010.

"We now need to ask ourselves if the party can continue in 2010. The key to success will be measured in product, price and process," Mr Rezek said in a statement.

"The growing Australian economy, backed by new products at great prices, will be the call to action in 2010.

"Buyers will have a plethora of choices so the dealerships which continue to focus on processes will be the winners this year."

The report showed only 16 per cent of vehicles sold in Australia in 2009 were locally produced. In the mid 1990s it was around 50 per cent.

Overall market leadership went to Toyota for the seventh consecutive year, selling 200,991 vehicles for a 21.46 per cent market share.

Holden finished a distant second, but the Holden Commodore was the top selling model for the 14th consecutive year.

"Our industry analysis shows that the Australian automotive industry is now a very open and competitive market," Mr Rezek said.

"The ultimate winners will be the consumers who are now enjoying a smorgasbord of choice and great value."

China in 2009 eclipsed the US as the world's largest automotive market for the first time.

The year also heralded the arrival of the first of the new Chinese brands, Great Wall Motors, into the global car market.

Chinese brands such as Chery and Geely are expected to enter into the Australian market during 2010.

The latest Australian Bureau of Statistics data showed new motor vehicle sales fell by 3.4 per cent in January, seasonally adjusted, after rising by 3.3 per cent in December 2009.

The Australian government in December rolled back its 50 per cent tax break for small businesses making big-ticket purchases such as equipment and cars.

- AAP