If new figures on the car buying habits of Australians are any guide, our views on climate change and petrol prices haven’t really changed much. Here’s Alexander Downer last weekend:

I think people’s concern about climate change is declining, by the way as people finally twig to the fact they will wear the enormous costs of mitigating climate change … I must get a Hummer.

Although that Hummer line was an attempt at humour (stress, attempt), new car sales show Australians are thinking along the same lines. Despite the price of petrol, SUV sales are up, passenger car sales are down.

Each month the Federated Chamber of Automotive Industries issues a handy report detailing the car sales to dealers for the previous month. The news from the June report, issued yesterday, is appalling.

It shows Australians are buying more and more fuel-guzzling SUVs: petrol or diesel, it doesn’t matter. Despite petrol price rises rising 40% or more in the past year, that hasn’t discouraged us from buying thirstier cars.

So much so that the increased sales of SUVs, especially in the medium category, was the main reason why overall car sales rose 3.5% in the six months to June, a period when petrol prices rose to top $1.70 a litre for petrol and nearly $1.90 a litre for diesel.

In the six months to June, 109,669 SUVs were sold, or a 20.2% share of sales. That’s UP from the 96,912 sold in the same period of 2007, which was a share of 18.48%.

The 12,000 extra SUV sales drove the overall growth in car sales for the first half of the year. The FCAI said 542,695 new cars, trucks and buses were sold in the first six months of 2008 — up 18,319 or 3.5% on the same period of 2007. Total passenger car sales fell in the six months to June 2008 to 316,025 (58.32% share) from 321,222 units (a 61.26% share). That can be explained by the slump in sales of six cylinder vehicles like the Ford Falcon and the Holden Commodore and the departure of Mitsubishi and its six-cylinder 380 vehicle from the market in March.

According to the FCAI, the single largest contributor to sales growth so far this year has been the Medium SUV segment, which has added 6,662 sales or 18.5%. Diesel, or petrol. But explaining the jump in SUV sales is harder, given all the moaning from the public about the cost of fuel.

Diesel has a reputation of being more efficient. It isn’t. It’s more expensive, and unless you are driving long distances the greater economy (more kilometres to the litre) is cancelled out by the premium you pay to the unleaded price.

Diesel SUV sales jumped to 31,313 in the six months to June, from 22,476 in the same six months of 2007 and sales of diesel passenger vehicles jumped to 19,133 from 12,800 units in the same period of 2007.

The reality is that Australians need a huge wake-up call like American consumers have had. As a result of their economic woes, US drivers are busy forcing their huge car industry to change overnight by abandoning their beloved SUVs, pick-up trucks and big models for smaller, fuel efficient models.

Ford, General Motors and Chrysler are slashing production and sales of these gas guzzlers in favour of smaller cars: it will take more than two years, thousands of jobs and billions of dollars. GM is actually looking at a car with an economy rate of 44 miles to the gallon! Even an SUV considered here as a medium sized, “efficient” vehicle like the Honda CRV is being abandoned in the US. Sales in June were down 19% while sales of Honda Accords and Civics were up 37% and 9% respectively.

Sales in Australia for the month of June were also at record levels — 106,541. That’s an increase of 1,444 or 1.4% over the same month last year, and an all-time record for any month in Australian motor vehicle sales history. That was accounted for by the “pull forward” of luxury vehicle sales because of the change in tax in the budget: the FCAI said that was estimated to have increased luxury car sales by around 23%, or 1,575 vehicles, in June 2008, compared to the same month last year.

Australians, it seems, are saying one thing about petrol prices but doing another in record numbers.

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Peter Fray
Peter Fray
Editor-in-chief of Crikey
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