Tuesday, June 23, 2009

Cardealers run out of stock as gloom lifts

THE car industry has gone through arguably its toughest 12 months, and is facing a problem few would have dreamed of - some dealers have run out of cars.

While car sales are down almost 20 per cent compared with this time last year, tax incentives introduced by the Federal Government last month appear to have given the market a boost.

Toyota, Mitsubishi, Holden and Ford are among brands that have reported better sales in May and June. Some Sydney dealers are having trouble supplying popular models. The sought-after vehicles include the Toyota HiLux, Ford Falcon G6E Turbo and Holden SV6 ute.

Under the changes to the tax rules, small businesses that turn over less than $2 million a year can claim an additional tax deduction of 50 per cent on the depreciation of work vehicles. Larger business can claim a 30 per cent tax cut.

The chief executive of the Federal Chamber of Automotive Industry, Andrew McKellar, said May sales figures suggested the sector had stabilised and further signs of improvement were expected this month.

"There is clear evidence that the tax break is providing the market with a renewed sense of optimism and confidence," he said. "The business tax break is proving extremely effective, providing a much-needed boost to vehicle sales and stimulating economic activity."

Most car makers shut off their orders six or more months ago and have been reluctant to increase them too quickly.

Scott Wakeling, dealer principal of the Paul Wakeling Motor Group at Campbelltown, said he was having trouble meeting demand. The group sells Holden, HSV, Hyundai, Mitsubishi, Volkswagen and Skoda.

"Stock is an issue," he said. "Inventory levels were a lot higher last year and so [car makers] slowed down the orders a bit and now it is very hard to get some models. We have seen a very strong run on the Hyundai iLoad commercial van. They are coming, but are not here now."

Mr Wakeling said stock of the Mitsubishi Lancer and Hyundai i30 small cars and Mitsubishi Triton utility was also low and it was "very, very hard to get a Holden SV6 ute".

The general manager of Mosman Toyota, John Clift, said stock was low on many models. "Stock is our biggest issue. Kluger is very hard to get and HiLux [ute] and HiAce [van] have dried up due to the tax break," he said.

The shortage is not only affecting imported cars. Staff and shift cutbacks by local car makers earlier this year has cleared excess stock and some popular models are sold out.

Ford has sold out of the Falcon G6E Turbo model until August. Ford had planned to stop production for two days at the end of this month, but its president, Martin Burela, said it was considering increasing production.

Subaru has no seven-seat versions of its Tribeca soft-roader, and its spokesman, David Rowley, said it was almost out of Liberty and Outback models.

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