There's a glimmer of hope for the global car market, writes motoring editor Alastair Sloane
There are faint signs that the global car market is slowly climbing out of its worst downturn in decades.
Sales data over the past couple of months for the crucial United States market echoes that of other countries, including New Zealand and Australia: May sales, while still slow compared with past years, were up considerably on April.
Across the ditch, Korean carmaker Hyundai recorded its best-ever May with more than 5000 sales.
"The New Zealand new car market, in line with overseas trends, now seems to be turning the corner," says Perry Kerr, CEO of the Motor Industry Association.
"Despite the sharp reversals of the last few months, May's new car sales were up on April registrations, which is an encouraging sign."
A total of 3979 new cars were registered in May, 12.9 per cent up on April's result, while the new commercial vehicle tally of 1314 units represented a 9.1 per cent hike on the previous month.
"Year to date, the new vehicle market is running at about two-thirds the level of the same period last year, but recent trends would suggest that this is as low as it will go," said Kerr.
Toyota remains in control of the market share stakes for both passenger and commercial vehicles, helped by an impressive performance in the commercial vehicle market.
The small car segment dominated May sales with the Suzuki Swift taking the honours, followed by Toyota Corolla, Mazda3 and Hyundai Getz. Year to date Corolla has opened up a lead over Commodore.
Motor Trade Association communications manager Andy Cuming said the good news for the new car industry was also matched by a return to stronger sales for used imports.
"A total of 5211 used imports cars were sold in May, which meant it was the second highest month so far this year," he said.
"While sales so far this year continue to run below the same period in 2008, the motor industry is feeling more confident that sales have turned a corner.
"There are now signs that more strength is returning to the market, bolstered by the range available in the new car sector, and more up-to-date used imports."
Analysts in the US say car buyers appear ready to return to showrooms, although not in the large numbers seen in past years.
The global recession has pulled down US sales to less than 10 million vehicles a year - a drop of more than 40 per cent from past years - and helped force General Motors and Chrysler to file for Chapter 11 bankruptcy protection.
May sales data appears to confirm a bottoming in the US car market, however. Ford sales across the nation were up 20 per cent on April; GM's were up 11 per cent.
"We're off the bottom," said automotive analyst Ken Elias, partner with Maryann Keller & Associates in Scottsdale, Arizona.
"People will want new cars because many have deferred purchasing a car since last year. We think it's positive for US automakers."
Analysts point to renewed consumer confidence; signs that the overall economy may be bottoming out; the recent surge in stockmarkets; a greater willingness by banks and other financial institutions to lend money; pent-up demand for new cars.
"There are more people looking at and seriously researching new car purchases," said Karl Brauer, editor in chief at Edmunds.com, the US car-information website.
"There's a sense among a lot of people that we've hit bottom and the economy will be coming back.
"You could see a pretty strong surge back into the showroom because sales have been so low and people haven't been buying for so long."
Brauer noted that increased traffic on the website typically signals an increase in car sales 30 to 90 days down the road.
But Gary Dilts, senior vice-president for global automotive at J. D. Power and Associates, cautioned that easier credit is key to any sales recovery. He said there's only been a "slight improvement" so far in credit availability.
"Credit is the big killer here. If the credit door doesn't open, nothing is going to change," said Dilts. "We've got people coming to the showrooms in much greater numbers than the sales data shows. The problem is they can't get through the credit door."
An unexpectedly strong rebound in sales this year to 12 million would still be a far cry from the sales levels that carmakers enjoyed in recent years. Average US sales neared 17 million a year this decade through 2007.
But experts say it will be years before US car sales approach the near-17 million numbers of past years, particularly now the Government has issued rules aimed at sharply boosting vehicle fuel economy.
"People are going to be pickier about spending large sums of money, which points to not as big a car or not as luxurious a car," said Brauer. "They're going to be more concerned about value and fuel prices."
- Additional reporting, agencies
