Will Car Ownership Rise in the Post-COVID Era?
New car sales have slumped all across the world due to the impact of COVID-19. Australia’s result last month, showing a near 50% drop in new car registrations, paled in comparison with some of those seen overseas, where the dive in sales was upwards of 95%.
With lockdowns keeping motorists at home, as well as the economic repercussions associated with job losses also weighing on sentiment, there has been an abrupt halt in sales across the industry. That’s not to say the local market was showing signs of growth beforehand, with two years of month-on-month declines setting the backdrop.
However, while it’s not yet being translated into sales at showrooms across the country, there is a growing sense of interest and buying intent being recorded among potential new car buyers.
Interest returning to the market
Just a few weeks ago, between April 18 and April 27, Carsales surveyed more than 3000 Australians. The company noted that 45% of non-car owners have changed their views regarding primary transport preferences.
In addition, the company’s findings suggested that 58.5% of respondents were more likely to consider buying a car, including 38% of all participants who are keen to buy a car right now. On the other side of the equation, just 21.9% of non-car owners were less likely to consider buying a car.
Rounding out the results, a significant 36.8% of non-car owners signalled they will probably use public transport less, with another 17.8% more likely to avoid using ride share services.
What’s driving demand?
From a position of financial standing, those who can still afford a car in this current financial climate have greater scope to negotiate a bargain due to excess stock. Add in record-low interest rates and those who have been holding off for a while are now in a good position to start shopping around.
More prominently, however, amid the pandemic it’s no surprise that people’s habits and perceptions of safe behaviour are changing. With social distancing being instilled into communities everywhere, it’s all but set to stay for the foreseeable future. This comes even with evidence that Australia has handled the health crisis far better than most other countries around the world.
There are two driving forces here. On the one hand, there will likely remain underlying health and hygiene anxieties among many, particularly those with existing health conditions that they may wish to manage. Convenience is also sure to prove a driving factor, with public transport set to come with hurdles in terms of limited supply and reduced capacity.
What does it all mean for the market? It certainly looks like Australians could shift back towards car ownership, despite slipping in recent times.
How do you feel about the near and mid-term outlook for commuting to work? Do you have concerns around sharing public transport and are you more likely to consider looking for a new car?
Level 2, 9 Help Street