Australian new car sales just hit a record high, rebounding strongly after weakening in the first few months of the year.
According to data released by the Australian Bureau of Statistics (ABS), total new car sales jumped to 100,476 in seasonally adjusted terms in May, surpassing the previous record set in March 2016.
The monthly increase, at 2.9%, was the largest in percentage terms since June last year.
The ABS said sales of passenger vehicles and sport utility vehicles (SUVs) surged by 3.8% and 4.1% respectively during the month, offset by a decline in other vehicle sales of 0.6%.
In numeric terms, sales of passenger vehicles retained top spot at 39,480, narrowly edging out those for SUVs at 38,357.
The ABS said sales increased in all Australian states and territories in seasonally adjusted terms, led by Queensland where they increased by a mammoth 5%.
From a year earlier, total sales increased by 4.9%, the fastest increase in percentage terms since January 2016.
By category, sales of SUVs increased by 7.1%, outpaced by a 10.4% lift in sales of other vehicles. Passenger vehicle sales were flat, continuing the category’s underperformance of recent years.
By state and territory, sales rose in all regions apart from the ACT with Victoria leading the pack with an increase of 8.7% reported. Sales also grew strongly in New South Wales and Queensland — rising 4.3% and 3.7% respectively — helping to offset weaker levels of growth elsewhere in the country.
The chart below shows annual sales by category over the past year.
According to the ABS, sale across all categories rose to 1.174 million, the largest annual total since January this year.
By category, sales of passenger vehicles stood at 472,284, marginally outpacing those for SUVs at 472,284.
Given the current trend, it appears to be only a matter of when, not if, SUVs will surpass passenger vehicles as the most bought new car category in Australia.
The rebound in total sales last month also suggests that firmer labour market conditions and increased corporate profitability may be starting to influence investment decisions across the broader Australian economy.
It’s still far early to tell whether its the start of a trend, but it’s a promising sign nonetheless.