The slump in house prices across the country led Australians to tighten their belts and it began to affect other large retail environments.
New car sales are now slowing for the seventh consecutive month in Australia, the longest stretch in years according to the latest Vfacts data from the Automotive Industry Chamber of Commerce (FCAI).
According to Westpac's latest consumer sentiment index, the intention to buy major households was at the lowest level since November last year and concerns about interest rates and house prices weighed on households with mortgages.
NSW – hit hardest by the reversal of home prices – also showed the biggest decline in new car sales. In October the country's largest new car market fell more than 9 percent compared to the same month last year. NSW fell only less than 5 percent this year.
Victoria also showed signs of weakness with a decline of more than 4 percent in October. However, the southern state has remained flat for this year, as has Tasmania.
In all other states and territories, the market is moving backwards.
The decline in housing in Sydney and Melbourne affected the upper end of the car market which had been hit hard.
The five biggest luxury brands, Audi, BMW, Lexus, Land Rover and Mercedes-Benz recorded fewer sales for this month and year.
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However, FCAI boss Tony Weber believes that the market has survived quite well despite a housing slump.
"Total sales so far in 2018 are 1.3 percent below the same amount during the 2017 record year.
"This shows that the market is broadly holding firm, even though growing consumer preferences are shown through the transition from passenger vehicles to SUVs.
"Given the slowing housing market and the current drought, overall results show the resilience of Australia's competitive automotive market."
Profits experienced after a strong start to the year quickly turned into a deficit as the year progressed. Private sales led the decline in October with regular buyers turning away from passenger cars in droves.
Almost every category of passenger cars surrenders land in October. Big cars continue the downward spiral with sales down by 65 percent.
Small cars – the second most popular segment in Australia – declined to 22 percent or more than 4,000 sales compared to the same month last year.
Acceleration from passenger cars to SUVs has accelerated in recent months with high-riders now reaching 43 percent of the overall market.
At the top of the sales chart it is business as usual for Utes. Toyota HiLux (4401) and Ford Ranger (3511) fill the top two places.
Next are three small cars, the Toyota Corolla (2663), the Mazda3 (with 2094, the only model to increase sales in October) and Hyundai i30 (2049). SUVs and ute complete the top 10.
In other indicators of the ever changing automotive landscape, Holden's manufacturing market share has dropped dramatically to 5.2 percent, down from 7.1 percent in the same month last year. Kia's Burgeoning brand is only around 800 sales beyond the Lion brand in the annual sales chart.
However, one good news is that much like housing, the new car market is on the side of buyers. Some very sharp transactions must be available throughout December so that dealers can meet annual targets and get bonuses.
TOP 10 BRANDS IN OCTOBER
Toyota 17,811, down -0.1 percent
Mazda 8172, up 1.5
Hyundai 7432, down 15.5
Mitsubishi 6217, up 12
Ford 5362, down 7.3
Holden 5256, down 32
Kia 4583, up 7.7
Subaru 4370, down 6.4
Nissan 4241, down 7.1
TOP 10 CARS IN OCTOBER
Toyota HiLux 4401
3511 Ford Ranger
Toyota Corolla 2663
Hyundai i30 2049
Mazda CX-5 2000
Subaru Forester 1792
Mitsubishi ASX 1739
Mitsubishi Triton 1650
Nissan X-Trail 1644
Source: Automotive Industry Chamber of Commerce