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FCAI: New credit conditions good news for Australian automotive consumers

The Federal Chamber of Automotive Industries (FCAI) has welcomed changes to the Australian credit framework announced by the Federal Government yesterday.

According to Tony Weber, the chief executive of the FCAI, the news could not come at a better time for the embattled Australian new vehicle market.

“As we strive to recover from the COVID-19 pandemic, a more efficient flow of credit to consumers and small business will be a strong stimulant to the economy.

“This is particularly true of the automotive sector in Australia, which has recorded some of its lowest sales ever during 2020.  Year-to-date figures for August demonstrated a 20.4 per cent drop in sales nationally for the industry,” Mr Weber said.

This decline in sales is on the back of a difficult period for the automotive sector, which has recorded over 29 consecutive months of decreasing sales.  The market regression has been attributed to a drop in consumer confidence sparked by a number of factors including the prevalence of natural disasters, unfavourable exchange rates and economic uncertainty.

However, it has been well reported that restrictive lending conditions have been one of the major factors contributing to the declining market.  Freeing up restrictions around financial lending, while at the same time continuing to safeguard consumer protections, will act as a stimulus for Australian industry.

“The Federal Government’s initiative to ensure that access to credit is more readily available for Australian households and small business will increase discretionary spending, boost business and safeguard jobs,” Mr Weber said.