Vehicle market shows signs of recovery

The federal government says a strong rebound in new car sales in June shows the government's targeted investment incentives are working.

With sales falling by just 3.5 per cent compared to June last year and the industry having its third-best month on record, Industry Minister Kim Carr said the Australian car market was performing better than those in the United States, Europe and Japan.

"This strong outcome means Australian vehicle sales performance has exceeded sales in most other major economies," Senator Carr said on Friday.

"In June 2009, US sales fell by 27.7 per cent and Japan by 14.5 per cent.

"We've outperformed Europe, where the latest figures show a 4.9 per cent drop, despite the fact that many European economies have adopted expensive scrappage programs aimed at stimulating vehicle sales."

The Federal Chamber of Automotive Industries (FCAI) said on Friday 102,847 vehicles were retailed last month.

The result was down 3.5 per cent compared to the same month in 2008 but was the best month for the industry over the past financial year.

June took demand over the first half of 2009 to 455,223, down 16.1 per cent on the same period last year.

Toyota was the top-selling company in June with 21,410 vehicles ahead of Holden on 12,167 and Ford on 10,194.

Toyota was also the market leader over the first six months of 2009 with 94,233 vehicles compared to 56,152 for Holden and 46,456 for Ford.

GM Holden's executive director of sales, marketing and after-sales, Alan Batey, said the vehicle market continued to recover from the global financial conditions that severely affected the automotive industry in the final quarter of 2008.

"We continue to see encouraging signs for a slow market recovery," Mr Batey said.

Senator Carr said most encouraging in the June result was the 12 per cent jump in business sales compared to the same month last year.

"It is proof positive that the government's carefully targeted investment incentives are working extremely well," he said.