Post by Cullyn Of Cerrmor on Jan 10, 2009 11:47:01 GMT 9.5
Car makers slash prices by up to $10,000
Toby Hagon National Drive Editor | January 10, 2009
New cars may be discounted by up to $10,000 but the deals will dry up by March, industry experts and dealers say.
Cars built this year are likely to cost thousands of dollars more than the new year deals being offered on otherwise identical 2008 vehicles.
Discounts of $5000 are common as car makers look to clear 2008 stock, while some brands have been shaving $10,000 or more - up to 20 per cent - off the recommended retail price of their vehicles. Others are offering 0 per cent finance, free on-road costs and fuel vouchers worth up to $5000.
But the deals on some models are already drying up as excess stock is cleared.
"Some cars have already stopped having deals on them because the [older stock] has already sold out," said Edward Rowe, public relations manager for Ateco Automotive, which imports brands such as Citroen, Fiat, Alfa Romeo and Ferrari.
"Generally the industry expects this [discounting] will be over by the end of February."
Car makers have been desperate to clear old stock because of weaker demand late last year. The global economic downturn caused vehicle sales to slide by more than 10 per cent in the second half of 2008; November was the worst month, with a 22 per cent drop on the previous year.
"The deals and the prices that are around now will not be seen again," said Mr Rowe, who warns of price rises in response to the weaker Australian dollar. "Once the car industry has cleared the excess stock that it has at the moment and supply starts to match demand the deals will disappear and prices will go up substantially because of the weaker Australian dollar."
Some brands, such as Holden and Toyota, took the unusual step of announcing imminent price rises towards the end of last year in an effort to stimulate showroom traffic and shift older stock. Others, such as Mazda, Ford and Honda, say they will increase prices soon.
Some estimates suggest there are almost 100,000 new vehicles in storage yards. Industry leader Toyota - which last year sold a record 238,983 vehicles - has more than 40,000 cars that arrived in the country last year waiting to be sold.
The prominent Sydney dealer Rick Damelian says the present deals will last only a few months, but not on all vehicles. "It's a simple case of mathematics," he says. "The deals will last as long as the 08 stock lasts."
The industry, which experienced a 3.6 per cent sales drop but still sold more than 1 million new vehicles in 2008, is predicting a sales downturn of between 10 and 20 per cent this year. The Federal Chamber of Automotive Industries acknowledges a challenging year ahead but reinforces the need for a positive attitude.
"We must be realistic about the outlook for the year ahead and acknowledge the impact that the global financial crisis is having on the broader economy," the chamber's chief executive, Andrew McKellar, said.
"Nonetheless, there are positives that will underpin demand in 2009, including lower fuel prices, reduced interest rates and the impact of additional fiscal measures implemented by the Federal Government."
Industry leader Toyota, which accounts for almost one in four new-vehicle sales, is more optimistic. "We have no illusions about 2009 … but we have cautious optimism," Toyota's senior executive director of sales and marketing, David Buttner, said.
Toby Hagon National Drive Editor | January 10, 2009
New cars may be discounted by up to $10,000 but the deals will dry up by March, industry experts and dealers say.
Cars built this year are likely to cost thousands of dollars more than the new year deals being offered on otherwise identical 2008 vehicles.
Discounts of $5000 are common as car makers look to clear 2008 stock, while some brands have been shaving $10,000 or more - up to 20 per cent - off the recommended retail price of their vehicles. Others are offering 0 per cent finance, free on-road costs and fuel vouchers worth up to $5000.
But the deals on some models are already drying up as excess stock is cleared.
"Some cars have already stopped having deals on them because the [older stock] has already sold out," said Edward Rowe, public relations manager for Ateco Automotive, which imports brands such as Citroen, Fiat, Alfa Romeo and Ferrari.
"Generally the industry expects this [discounting] will be over by the end of February."
Car makers have been desperate to clear old stock because of weaker demand late last year. The global economic downturn caused vehicle sales to slide by more than 10 per cent in the second half of 2008; November was the worst month, with a 22 per cent drop on the previous year.
"The deals and the prices that are around now will not be seen again," said Mr Rowe, who warns of price rises in response to the weaker Australian dollar. "Once the car industry has cleared the excess stock that it has at the moment and supply starts to match demand the deals will disappear and prices will go up substantially because of the weaker Australian dollar."
Some brands, such as Holden and Toyota, took the unusual step of announcing imminent price rises towards the end of last year in an effort to stimulate showroom traffic and shift older stock. Others, such as Mazda, Ford and Honda, say they will increase prices soon.
Some estimates suggest there are almost 100,000 new vehicles in storage yards. Industry leader Toyota - which last year sold a record 238,983 vehicles - has more than 40,000 cars that arrived in the country last year waiting to be sold.
The prominent Sydney dealer Rick Damelian says the present deals will last only a few months, but not on all vehicles. "It's a simple case of mathematics," he says. "The deals will last as long as the 08 stock lasts."
The industry, which experienced a 3.6 per cent sales drop but still sold more than 1 million new vehicles in 2008, is predicting a sales downturn of between 10 and 20 per cent this year. The Federal Chamber of Automotive Industries acknowledges a challenging year ahead but reinforces the need for a positive attitude.
"We must be realistic about the outlook for the year ahead and acknowledge the impact that the global financial crisis is having on the broader economy," the chamber's chief executive, Andrew McKellar, said.
"Nonetheless, there are positives that will underpin demand in 2009, including lower fuel prices, reduced interest rates and the impact of additional fiscal measures implemented by the Federal Government."
Industry leader Toyota, which accounts for almost one in four new-vehicle sales, is more optimistic. "We have no illusions about 2009 … but we have cautious optimism," Toyota's senior executive director of sales and marketing, David Buttner, said.