Are falling sales figures a reflection of a weak economy or has car ownership become less important to many Australians?

The end of the affair: why Australians are falling out of love with cars

The sky above is a sheet of grey as Rachel Bradley stands in a used-car yard along Port Road, Adelaide, where she checks out the prices on four-wheel drives while looking a little lost.

Bradley doesn’t know much about cars and doesn’t have her licence. She didn’t see the point when she was younger – cars were expensive and buses were cheap. Now the 27-year-old freelance photographer is moving to Melbourne and knows that she’ll need a car for her business to grow.

A sign on the windshield of an older model Mitsubishi Pajero four-wheel-drive lists it for $6,999. She is working two jobs and is owed $2,000 from work going back two months. Thinking about the price makes her wonder about what might happen if she were to miss a payment because of an unpaid invoice.

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“It gives me anxiety,” Bradley says. “What happens if I can’t pay it back?”

The Federal Chamber of Automotive Industries’s retail figures show car sales in Australia have been falling for 12 months, with sales in New South Wales falling 11% and 11.7% in Victoria in February alone.

Tony Weber, the chamber’s chief executive, says car sales had grown at record rates for the past five years but had fallen lately.

“There’s some good reasons it has slowed,” he says. “We’ve had the banking royal commission, slowed lending, the drop off in house prices, especially in New South Wales and Victoria, which is correlated in those states.

“There’s been almost a perfect storm of issues that have come across the plate.”

Facebook Twitter Pinterest Holden tried to find an identity after domestic manufacturing ended by signalling a break with the past in its advertising. Photograph: General Motors Holden

Falling car sales are generally considered an indicator of economic health as they are a measure of the spare cash people have to make big investments.

Some, like the financial analyst Martin North, read the falls as a sign of things to come as households try to “bunker down and spend less”.

“A falling number of car sales is a very important indicator [of economic health] because after a house the car is the next [most expensive] thing people buy,” North says.

“That’s a consistent pattern we’ve seen not just here, but overseas in the UK and US ahead of the GFC. When finances get tight, buying a new car gets put off. The second point is that we’ve got a higher delinquency rate for those who have taken out loans for cars.

“The third point is that there are many more secondhand cars, trailers, boats, water skis, all for sale at the moment and that’s the third indicator for me that we’ve got issues with regard to households and their budgets.”

With 68 brands selling 380 models of cars, vans and trucks in a population of 25 million, Australia is one of the most competitive car markets in the world.

Facebook Twitter Pinterest Car sales can be an indicator of economic health as they are a measure of the spare cash people have to make big purchases. Photograph: David Crosling/AAP

Every year 1.2 million cars sell across the country. New cars, however, make up only a small proportion of overall sales. Most people buy used cars.

Research by Roy Morgan shows that over the six months until December 2018, the number of people thinking about buying a new car over the next four years fell by 192,000 – most of them were young people aged 18 to 34.

Danielle Woods, an economist from the Grattan Institute, is not surprised young people are not in a position to buy a car as the wealth and income gains from the past decade have largely flowed to older households with assets.

“We’ve come to expect that each generation will be better off than the one before,” Woods says. “What we’re seeing is that millennials aren’t experiencing the same growth in living standards that we’ve come to expect from previous generations.”

The USA has its gun culture; we have our car culture George Miller

This is especially a problem for Australia where an ageing population means the taxes needed to pay for critical services such as health care are increasingly being paid for by younger people of prime working age.

“An older household earning $100,000 a year in income is paying the same amount of tax as a younger household earning $50,000 a year in income,” she says. “It blows my mind just how far we push these age bracket tax breaks.”

Alysia Blackham, an associate professor at the University of Melbourne law school, says part of the problem is casual work.

Although ABS statistics show there has not been an overall increase to the rate of casual work since the 1990s, it remains a significant component of the Australian economy. And it is disproportionately young people in that situation: three out of four employees aged 15 to 19 and two in five aged 19 to 24 are employed as casuals.

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“If someone is going to have their shift cut, they’re more likely to be young,” Blackham says. “They’re constantly in a phase of precarity. They don’t know how much work they’re going to have from one week to the next.

“If you’re looking for a major investment like a loan for a car, it’s hard to know if you’re going to make the payments.”

All of these factors spell change for a country that once claimed a car culture so distinct, and so aggressive, the accidents it resulted in inspired the Mad Max franchise.

The films’ Australian director, George Miller, summarised the situation for Americans when he told Cinema Papers in 1979: “The USA has its gun culture; we have our car culture.”

Owning a car now is a luxury. Millennials don’t need to travel as much John Ruggiero

John Ruggiero, managing director of Automotive Marketing Australia, which caters to aftermarket retailers, already sees it changing.

“We’re a big country,” he says. “We still love cars. If you look at the grand prix, the attendance numbers are huge.

“Owning a car now is a luxury. Millennials don’t need to travel as much. They take public transport. Their way of communicating with each other is far easier.”

As proof, Ruggiero points to the search by former Australian icons such as Holden to find an identity after domestic manufacturing ended by trying to break with the past.

“Their messaging became confused,” he says. “I was driving down a highway in Melbourne and the sign said, ‘Buy Holden because it’s not the car your dad drove.’

“They were trying to detach themselves from the past and trying to be relevant by appealing to young people. I think everyone just saw it as offensive.”

Facebook Twitter Pinterest Australia Day ute muster in Darwin. ‘We’re a big country. We still love cars,’ John Ruggiero of Automotive Marketing Australia says. Photograph: Jonny Weeks/The Guardian

Back at the sale yard, Rachel Bradley says for her a car is a marker of adulthood. All her friends with stable careers seem to have one but the cost means she keeps putting it off, and the longer she puts it off the larger the responsibility seems.

“It’s such an adult thing,” she says. “But then I still feel like a 16-year-old shitkicker who can’t get their life together.

“It’s a big cost and there are better things I could be doing with my money. I can get around with public transport. I hire a rideshare to get to jobs. I think it’s just easier to put it off. It feels like such a big investment and an ongoing cost.

“I put a lot of things off until the last minute like that. When I bought my first laptop, I put that off as well. But then I couldn’t work without one. You can get around without a car.”

When the sales rep approaches to ask if she needs a hand, she tells him she’s just browsing. She leaves shortly afterwards.