As rates rise, how are car sales holding up?
Interest rate rises are starting to hit discretionary spend. Big ticket items like cars could feel the impact. But so far the numbers locally and globally are withstanding headwinds.
**As rates rise, how are car sales holding up?**
Interest rates hit an 11-year high this month on the back of nine consecutive hikes since May. There may be more to come, but cost of living increases have not yet slowed down car sales.
Industry sales data (Vfacts) shows 86,878 new vehicle registrations in February, an increase of 1.8 per cent on February 2022. For the first two months of 2023 vehicle sales are up 6.5 per cent. It would take a double-digit reversal in March to tip 2023 into negative territory.
After record sales in 2022, Volvo Car Australia’s new registrations are holding up against a higher baseline. February sales were up 0.5 per cent year-on-year to 858 units following strong January growth of 18.7 per cent to 862 units.
**Variable speed limits**
The pandemic severely disrupted supply chains across virtually all industries, with carmakers no exception. While average wait times in Australia are starting to ease from last year’s peak, six months is common across most brands – and for some models, it’s closer to a year. The picture is much the same in other parts of the world.
That could mean the impact of rate rises may be more likely to be felt in the second half of 2023 – because many buyers ordered the cars being delivered now in mid-2022, when interest rates were lower.
For the present, markets such as the UK also appear to be shrugging off high inflation and interest rates and moving slowly toward pre-pandemic registration volumes.
**Volvo now and next**
After record sales in 2022, Volvo Car Australia’s new registrations are holding up against a higher baseline. February sales were up 0.5 per cent year-on-year to 858 units following strong January growth of 18.7 per cent to 862 units.
Demand for the XC40 is consistently strong across all variants. The XC40 remains the best selling small luxury SUV in Australia, per latest Vfacts data, and the best car in its class bar none, according to drive.com.au. Combined pre-orders for the electric variants of the XC40 and the all-electric C40 moving into 2023 stood at circa 2,500 units.
Volvo Car Australia Managing Director, Stephen Connor, has said conversations to secure higher unit volumes have proved “very positive”, though across most manufacturing verticals navigating global supply chain bottlenecks is no mean feat.
For details on in-stock vehicles available for immediate delivery, speak to your local retailer.
Share
