If new figures on the car buying habits of Australians are any guide, our views on climate change and petrol prices haven’t really changed much. Here’s Alexander Downer last weekend:
I think people’s concern about climate change is declining, by the way as people finally twig to the fact they will wear the enormous costs of mitigating climate change … I must get a Hummer.
Although that Hummer line was an attempt at humour (stress, attempt), new car sales show Australians are thinking along the same lines. Despite the price of petrol, SUV sales are up, passenger car sales are down.
Each month the Federated Chamber of Automotive Industries issues a handy report detailing the car sales to dealers for the previous month. The news from the June report, issued yesterday, is appalling.
It shows Australians are buying more and more fuel-guzzling SUVs: petrol or diesel, it doesn’t matter. Despite petrol price rises rising 40% or more in the past year, that hasn’t discouraged us from buying thirstier cars.
So much so that the increased sales of SUVs, especially in the medium category, was the main reason why overall car sales rose 3.5% in the six months to June, a period when petrol prices rose to top $1.70 a litre for petrol and nearly $1.90 a litre for diesel.
In the six months to June, 109,669 SUVs were sold, or a 20.2% share of sales. That’s UP from the 96,912 sold in the same period of 2007, which was a share of 18.48%.
The 12,000 extra SUV sales drove the overall growth in car sales for the first half of the year. The FCAI said 542,695 new cars, trucks and buses were sold in the first six months of 2008 — up 18,319 or 3.5% on the same period of 2007. Total passenger car sales fell in the six months to June 2008 to 316,025 (58.32% share) from 321,222 units (a 61.26% share). That can be explained by the slump in sales of six cylinder vehicles like the Ford Falcon and the Holden Commodore and the departure of Mitsubishi and its six-cylinder 380 vehicle from the market in March.
According to the FCAI, the single largest contributor to sales growth so far this year has been the Medium SUV segment, which has added 6,662 sales or 18.5%. Diesel, or petrol. But explaining the jump in SUV sales is harder, given all the moaning from the public about the cost of fuel.
Diesel has a reputation of being more efficient. It isn’t. It’s more expensive, and unless you are driving long distances the greater economy (more kilometres to the litre) is cancelled out by the premium you pay to the unleaded price.
Diesel SUV sales jumped to 31,313 in the six months to June, from 22,476 in the same six months of 2007 and sales of diesel passenger vehicles jumped to 19,133 from 12,800 units in the same period of 2007.
The reality is that Australians need a huge wake-up call like American consumers have had. As a result of their economic woes, US drivers are busy forcing their huge car industry to change overnight by abandoning their beloved SUVs, pick-up trucks and big models for smaller, fuel efficient models.
Ford, General Motors and Chrysler are slashing production and sales of these gas guzzlers in favour of smaller cars: it will take more than two years, thousands of jobs and billions of dollars. GM is actually looking at a car with an economy rate of 44 miles to the gallon! Even an SUV considered here as a medium sized, “efficient” vehicle like the Honda CRV is being abandoned in the US. Sales in June were down 19% while sales of Honda Accords and Civics were up 37% and 9% respectively.
Sales in Australia for the month of June were also at record levels — 106,541. That’s an increase of 1,444 or 1.4% over the same month last year, and an all-time record for any month in Australian motor vehicle sales history. That was accounted for by the “pull forward” of luxury vehicle sales because of the change in tax in the budget: the FCAI said that was estimated to have increased luxury car sales by around 23%, or 1,575 vehicles, in June 2008, compared to the same month last year.
Australians, it seems, are saying one thing about petrol prices but doing another in record numbers.
I have a 1.6ltr Pug diesel turbo and I fill it up about every 5 weeks. Before I had a reasonably modern 6 cyl petrol engined car that, for the same travelling, I needed to fill just about every week.
The Pug works well in the city and the country and is configured as a ‘Tourning’ which means I can turn it into a small panel van if I need it.
Diesel is not only MORE efficient, the stress on the engine is much less so (touch wood) it should last much longer than a high revving petrol buzz box.
Anything that uses fossil fuels is a, at best, a medium term solution, but I can’t understand why diesel doesn’t sell better here. I also agree that our lack of exploitation of natural gas is a mystery deserving of a good conspiracy theory!
You need to be smarter than simply stating SUV = gas guzzler. The SUV category includes many smaller vehicles with four-cylinder engines that use fuel at the same rate as sedans.
I drive a Honda CR-V that has the same engine as my wife’s Honda Accord Euro. The two vehicles get about the same fuel efficiency as each other, so your automatic equation is plainly wrong in this case.
As a commuting cyclist I have developed a strong dislike of SUVs, so did I buy one? Because I wanted a wagon and small, decent wagons are nearly impossible to find. That category of car has been largely replaced in the market by small SUVs.
“Diesel has a reputation of being more efficient. It isn’t. It’s more expensive, and unless you are driving long distances the greater economy (more kilometres to the litre) is cancelled out by the premium you pay to the unleaded price.”
Glenn should check his facts on this one – Modern diesel engines are 25-30% more economical than their petrol equivalents to travel a given distance. The price differential between ULP and diesel is about $1.53 and $1.80 per litre (courtesy WA Fuelwatch site). From what I can see there is still a cost advantage to diesel – and it produces less CO2 per kilometre travelled.
Factual error re US Honda CRV sales – they have increased every month this year to a 6 month increase of 42% over last year and a June increase of 50. So get the facts right please (Google Honda US June sales if you want references).
And as others have said, diesels use less fuel per mile/kilometer so people are putting their money into the right thing – the argument for diesel is save the planer, not save my pocket.
“Diesel has a reputation of being more efficient. It isn’t. It’s more expensive, and unless you are driving long distances the greater economy (more kilometres to the litre) is cancelled out by the premium you pay to the unleaded price.”
This is just plain wrong & Nigel is absolutely correct. What’s more Australia is the only country in the world as far as I know where diesel is more expensive than petrol (I know because I go to many of them). Everywhere else it is 2/3rds the price. This is the main reason for diesels being developed to the high level they have in Europe. Is it surprising that there is a dearth of diesel vehicles in Australia?
Diesel used to be cheaper in Australia; this changed in the 70’s when the govt at the time decided it was too cheap & was eroding it’s tax base. I don’t agree with any of the 5ct reduction stuff but diesel should certainly be brought back in line with the rest of the planet which would encourage the sales of efficient vehicles & assist the transport & agricultural sectors amongst many others.
It is interesting that this pricing disparity is seldom raised; it is high time it was.