Sales of new motor vehicles fell a seasonally adjusted -1.6% in May. Sales have fallen for 3 of the past 4 months. Before getting carried away that this is further evidence of a slowdown in the economy we should add that new car sales are quite volatile from month to month.
Sales of 4WD's showed their biggest monthly decline since August 2006 falling -4% showing evidence that buyers are trading down from petrol guzzlers to more fuel efficient models. Sales of new passenger cars showed a healthy 1.6% increase for the month of may.
If high oil prices persist it would come as no surprise to see car sales soften in the second half of the year as consumers grapple with higher borrwing costs tighter lending standards and a slowing economy.
Monday, 23 June 2008