THE interest rate rise this week won't slow Australia's booming car sales - at least not yet.
That's the opinion of Andrew McKellar, chairman of the Federal Chamber of Automotive Industries, which published the latest figures for car sales yesterday. They show the industry is still on course to pass 1 million sales this year despite a slowdown in October.
The figures show 90,925 new vehicles were sold in October, only 0.1 per cent more than October last year. But Mr McKellar told the Herald that last year's figures were boosted by government tax incentives.
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"October sales last year, the end-of-the-year sales were starting to build as people, particularly business buyers, got into the market to take advantage of the stimulus that was in place at that stage through the business tax break," he said.
"So my interpretation is that we've managed to maintain the strength in October against those sorts of levels."
Mr McKellar said the Reserve Bank's decision to raise official interest rates this week should not be enough to slow down sales.
But he warned that the effect of the rate rise could be felt early next year, and said further rises could slow down sales.
"I think we do have a concern that that could have a dampening effect on economic activity down the track," he said. "I think it will really take several months for that to play out.
''I think the risk is if we were to see any further follow up in interest rates that would be something that is more likely to have a tangible impact on the market.
"At this stage, the fact that interest rates have been stable for a number of months, we're not excessively concerned by one increase in official interest rates.
''But if there was to be a series of interest rate increases that would potentially cause greater concern about the impact that would have on the market."
Toyota continues to top the sales charts thanks to strong sales of its Prado, Kluger and RAV4 sports utilities. It is well ahead of Holden and Ford, which fill the next two places.
Stephen Ottley
November 5, 2010
SMH.com.au
