Car sales stall as consumers cautious

Car sales have slowed for a second straight month but cheaper petrol is expected to boost showroom activity in 2015.

new cars at a compound

Car sales have slowed for a second straight month but cheaper petrol is expected to boost activity. (AAP)

Car sales have stalled for a second straight month as consumers remain cautious and the Australian dollar falls.

The number of new vehicles leaving showrooms slowed by 0.6 per cent in November to 91,869, after a fall of 1.8 per cent in October.

"Growth in motor vehicles sales remains lacklustre and indicates an unwillingness to increase spending among consumers and businesses," St George senior economist Janu Chan said.

CommSec economist Savanth Sebastian said a weaker Australian dollar was yet to push prices higher, but may have reduced discounts being offered by dealers.

"There may be an impact of smaller discounts being provided by new car retailers," he told AAP.

The Australian dollar fell from 88.40 US cents to 85.06 US cents over October and November.

While overall sales are dropping, sales of small four-wheel drives, also known as sport utility vehicles, rose 1.3 per cent in November.

That took SUV sales to a record high of 350,000 over the past 12 months, meaning two in every five cars sold are SUVs, Mr Sebastian said.

Car sales remain healthy despite the recent falls, and falling petrol prices are likely to drive sales in 2015, he said.

The average price of unleaded across the country in the week to December 14 was just short of a four year low at 132.4 cents per litre.

"Falling petrol prices, improvements in household budgets, it's very likely in 2015 you'll see an improvement in car sales," Mr Sebastian said.


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