The latest survey report from Roy Morgan reveals some key indicators regarding why new car sales figures continue to tumble.
Despite the report indicating automotive is among the higher trust industries on a “Net Trust Score” with the public along with retail, supermarkets, insurance, services and tourism, the economic situation in Australia is drastically skewed in favour of the wealthy.
According to the report, the top 10% of Australia’s wealthiest population holds more than 47% of that wealth, which has increased by roughly 10% since 2007.
However, it doesn’t mean Australia is entirely worse off because 90% of the population is wealthier than it was in 2007 as the Global Financial Crisis loomed, where actual net wealth was once $4.5 trillion, it is now at more than $8.6 trillion.
But the reality for consumers, and potentially their inability or reluctance to buy new cars, can be found when using a median Consumer Price Index adjusted figure, which finds Australians are 2.2% poorer.
Part of the problem lies, according to chief executive Michele Levine, with the issue Australians have in the institutions they trust such as the Royal Auto motoring clubs and PayPal, versus the ones they firmly distrust like big banks, oil companies and certain insurers like CGU or Youi as presented in the report.
The survey found all levels of government, local, state, federal, and many of their departments such as Centrelink and the Australian Tax Office, are deemed untrustworthy.
“We keep trying to rid ourselves of the evils in the world around us, but yet we’re all distrusting of governments as the regulators to change things,” she says.
“Trust is the foundation of all human connections, but distrust causes customer churn, it impacts on engagement and retention – it is a bellwether for a sustainable future,” Levine explains.
She says in the moment of hurting new car sales, the automotive industry needs to focus on what customers want – or don’t want.
“The critical point for the car industry is consumers’ move away from things to experiences,” she says.
“People are less defining themselves by having things and more on the experiences they’re engaging in and I think we cars it’s going to be a downward trend,” Levine suggests.
“Where does the manufacturer and dealer sit as the model changes from owning to using; at the moment Toyota is so ubiquitous when you think ‘car’ and other brands need to be in that visibility space is incredibly important,” she advises.
Levine says the economy could be facing early symptoms of a Global Financial Crisis in terms of consumers’ reluctance to splash out on big-ticket purchases like new cars.
“In the US car companies just couldn’t sell cars during the GFC, so one brand realised people were too scared to buy a car they couldn’t pay for and therefore get a bad credit rating,” she highlights.
“So that brand allowed people to lease the car with the arrangement to buy back the car at an agreed rate if the customer lost their job,” she points out.
“What is the next strategy the car companies and dealers can do to recognise where peoples’ fears are and address that?” she asks.
