Sales of new cars and trucks in Australia crashed by 35 per cent last month, the biggest drop in demand for the month of May over the past 30 years.
The Federal Chamber of Automotive Industries says 59,894 vehicles were, a 35.3 per cent fall on the 92,561 vehicles retailed in May last year.
The drop came on top of the 48.5 per cent fall in sales in April, as the impacts of the coronavirus pandemic across the business sector intensified.
On a year-to-date basis, the market was down 104,468 units, or 23.9 per cent.
FCAI chief executive Tony Weber said the automotive sector had been under pressure for some time with May's decline the 26th consecutive month of falling demand.
"The causative factors are well documented - droughts, floods, bushfires, tight lending conditions, unfavourable exchange rates, and political uncertainty," Mr Weber said.
"Now, we add to that the devastating effect of the COVID-19 pandemic over the past three months.
"While COVID-19 is primarily a health crisis, it has brought about an economic crisis as well.
"These are difficult times for the global and domestic economy, and this, of course, has repercussions for the local sales sector, including the automotive industry."
Toyota was the market-leading brand in May, with 14,466 sales, ahead of Mazda on 5661 and Hyundai on 4109.
Toyota also enjoyed a clear lead over the first five months of 2020 with sales of 74,862 compared to 29,427 for Mazda.
Among the states, the market held up best in Western Australia where sales fell by just 26.4 per cent in May, while Tasmania was hit the hardest with demand down by almost 52 per cent.
Mr Weber said while the fall in consumer confidence and household spending had severely curtailed retail activity, the government's stimulus measures and the gradual easing of pandemic-enforced restrictions had brought some optimism.
"Anecdotally, we may be beginning to see some green shoots in the marketplace," he said.
"With people venturing out a little more, dealers have advised of a slight uptick in floor traffic through dealerships.
"Additionally, we are hearing from some brands that website traffic is on the rise - a sure sign of increased purchasing interest."
Australian Associated Press