TIC makes case for $450,000 asset write-off


June was a record month but driven only by light trucks and vans

TIC makes case for $450,000 asset write-off
Tony McMullan

 

A recent bump in light duty truck and van sales could be mirrored in the heavy and medium sectors by increasing the instant asset write-off (IAWO) to $450,000, the Truck Industry Council (TIC) argues.

Commenting on the latest truck sales data, TIC reports June 2020 resulted in the best monthly sales ever recorded in Australia.

In total, 4,620 heavy trucks and vans above 3.5t GVM were sold, eclipsing the previous best monthly result of 4,231 in June 2018.

"While the overall number looks great, we need to dig a little deeper into the data to understand how these record sales were achieved," TIC notes.

The tally of 1,134 heavy duty trucks was down 20.9 per cent on the market peak of 1,433 in June 2018.

Medium duty’s 897 sales were also down 16.4 per cent on their market peak of 1,073 in 2008.

The small end of the heavy vehicle market, "buoyed no doubt by the federal government’s instant asset write-off of $150,000", saw a June surge in sales, TIC notes.

June 2020’s tally of 1,583 units surpassed the previous monthly record of 1,304 in June 2018, a 21.4 per cent increase.

The Light Duty van segment, with 1,006 deliveries, also beating the previous best result in June 2019 (714) by a huge 40.9 per cent.


How the truck sales numbers stacked up in June, here


While June 2020 was an all-time record sales month, it was entirely driven by light duty truck and van sales, the analysis highlights the need for a wider IAWO scope to encourage

"We are now gaining a real insight into just how COVID-19 has impacted heavy vehicle sales in 2020, with the Heavy Duty segment hit very hard," TIC CEO Tony McMullan observes.

"The record, or near record, sales in both Light Duty segments appears to be a clear indication of the effectiveness of the federal government’s instant asset write-off incentive of $150,000, coupled with the financial year end.

"While the result has been of notable benefit for smaller trucks, it is clear that financial stimulus is required at the heavy end of the truck market.

"The Truck Industry Council has been calling upon government to increase the instant asset write-off to $450,000 for heavy vehicle specific purchases, such action would stimulate sales in the Heavy and Medium Duty truck sectors."

McMullan notes a contraction of the market is to be expected throughout the historically slow months of July, August and September as the new financial year begins.

"Coupled with an Australian economy still reeling from the effects of COVID-19 and now with much of Victoria facing Stage 3 lockdown restrictions again, I have concerns that the better than expected June sales result will be a short-lived aberration," McMullan adds.

 

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