Aussie sales power on

BY BRUCE NEWTON AND JOHN MELLOR | 23rd Apr 2003


FORD Australia figures are showing that as many as 890,000 cars and trucks will be sold in Australia this year if the car industry continues to boom at current rates.

This aligns with Holden figures that are theoretically pointing to 880,000 units sold this year if the market holds up.

Ford internal seasonally adjusted annualised forecasts show that January sales were so strong they were running at an adjusted annualised rate of a market of 933,000 units.

Ford Australia president Geoff Polites said that the first quarter of a year was normally the weakest because the fleets were not usually taking delivery during the annual holiday period.

The figure for February was 870,000 and shot up to 879,000 in March.

In March 8000 more vehicles were sold than in March 2002, making first-quarter sales 12,000 more than last year's record. This is 25,000 units more than in the first quarter of 2001.

Mr Polites said lower tariffs had probably helped but he said "no-one should underestimate the impact of the GST on cars. The sales tax on cars is much lower and businesses effectively get their cars tax free now.

"We saw the (GST) benefit initially with private buyers. Businesses were on a (three-year) programmed cycle and now get the full benefit.

Businesses that were on three-year leases with used cars can now afford new cars." Mr Polites said business and government sales were up about nine per cent and the private market up 5.4 per cent.

"We have been forecasting 815,000 for this year. We have been at 815,000 for quite a while.

Obviously it is going to be bigger than 815,000," he said.

"The real number is probably going to be closer to the 824,000 last year. I would say we are on track to achieve 824,000 right now.

"Given the start, we think that the back half of the year is not going to be as strong." Mr Polites said the figures indicated April would continue to be strong, even taking into account the Easter and Anzac Day breaks.

He said there were "uncertain economic indicators out there" that would account for a slow down in vehicle demand.

The drought and a slowing in business confidence were two factors.

Holden executive director sales and marketing Ross McKenzie was more bullish about the second half of 2003.

"There is nothing on the horizon that I can see that is likely to slow it down," he said at last week's WK Statesman/Caprice range launch.

Mr McKenzie said Toyota's aggressive marketing attack to regain the number one sales position was an important reason for the sales increase, in particular its good deals on the budget buy Echo and Corolla.

He pointed to a 10 per cent devaluation in the Yen against the Aussie dollar as being a key asset for Toyota that would mean a year-long fight for market leadership.

"In dollar terms that (devaluation) basically means Toyota has been given a free kick of $1500 per car," he said.

Now most companies would take that $1500 straight to the bottom line but you all know Toyota's objectives and their willingness to spend - and that's what they are doing. They are using that $1500 a car to spend more money on advertising, bonus and support." Mr McKenzie also said Toyota's dominance of the SUV market made it hard to combat.

But Holden has a new model launch virtually every month for the rest of the year, including its Cross8 crew-cab and wagon variants.

"I assure you that no-one is giving up," Mr McKenzie said.
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