The Australian Federal Chamber of Automotive Industries released new car sales figures for December that shows sales for December fell 14.9% from December 2017. Sales for the month fell by 15,292 vehicles to 87,528. With the shift to SUVs, the passenger vehicle sales fell by 26.3% and the SUV market only falling 7% for the month.
The trend is similar around the world. Jaguar Land Rover (JLR) in the UK has confirmed that it is cutting 4,500 jobs from its 40,000 strong UK workforce. Last year 1,500 jobs were cut. JLR cited concerns about Brexit, a slump in demand for diesel cars and a sales slowdown in China.
Detroit USA is dealing with a severe downturn in car sales, highlighted by the shift away from traditional cars towards SUVs. Car sales have plunged 30% over four years. Bloomberg cites overcapacity in the US equivalent to 20,000 jobs directly and 10 excess manufacturing factories. Due to high fuel prices 10 years ago and inefficient SUV fuel economy, the industry moved to producing more passenger cars. With the current low fuel prices and SUVs’ fuel economy becoming much more efficient, the industry has been left wrong-footed in an overall declining market.
Western European Passenger car registrations fell 8.5% (year over year) in December. In France, December recorded a 14.5% YoY decline, with Germany falling 6.7%. Other notable YoY falls were: Austria – 25.2%, Belgium – 17.4%, Denmark – 15.8%, Finland – 23.4%, and Sweden – 34.4%.
China’s Passenger Vehicle (PV) sales in November fell by 15.7% year-on-year (YoY) to 2.24 mn units, while the Light Commercial Vehicle (LCV) sector increased by 5.1% YoY. (source: LMV Automotive).
What’s happening? Have we reached Peak Car? We are seeing the younger generation having a much less interest in owning a car compared to their parents. There is a trend in Urban planning to catering for more public transport and building better infrastructure for pushbikes and pedestrians. The only solution to the suburban sprawl, crush loaded by immigration, is the requirement to live close to transport hubs. Longer commute times can be bearable with access to high speed internet making the journey more productive. Why own a car when you are burdened by additional taxes in the form of 5% stamp duty, luxury car tax, fuel tax, parking fines, speeding fines, toll roads all feeding the increasing revenue needs of Government.
The barriers to accessing a car are falling. From buying a car, insurance, parking space, repairs and maintenance – to having a phone and money in your pocket. A phone app allows you to book an Uber, rent a private car, rent a pushbike or rent a scooter.
The death of the car is a long way from a reality but we are probably past peak car.