New-car sales crunched

NEW-VEHICLE sales in Australia plunged more than 18 per cent in January as the global financial crisis continued to undermine confidence and shake up the automotive sector.

Local manufacturers Toyota and Ford were both down by more than 20 per cent, with importer Mazda outselling its main shareholder Ford to take third place overall.

In so doing, the Mazda3 pushed past the Holden Commodore and Toyota Corolla to take the number-one spot on the bestsellers’ list.

GM Holden got off relatively lightly, dropping 14 per cent in January – traditionally a month where fleet sales are lower than usual.

Of the brands to post higher sales in January, leading South Korean importer Hyundai was up 16 per cent and German luxury marque Audi climbed 5.5 per cent over the corresponding month last year.

Left: Audi A4.

Combined with the decline in the overall market, Audi’s market share jumped to 1.6 per cent - its highest share on record. A 30 per cent rise in sales in 2008 lifted Audi’s share to 0.9 per cent.

“It may not be as explosive as it has been in the past, but 5.5 per cent on top of a historic high in January last year is excellent for us,” said Audi Australia corporate communications general manager Anna Burgdorf.

“We are extremely happy to have such a strong result. It’s only one month, but we didn’t stop, let things go down in December, knowing ’09 would be tough.”

The overall sales data has set the scene for a sobering year, with some insiders suggesting that, later this year, the January figures might look relatively good.

There are strong warnings that sales may turn more sharply downward once 2008 inventory has been cleared and 2009 prices – supercharged by currency moves – are put in place in coming months.

Stock levels are running high across the industry, particularly in the luxury-car sector, where inventory averages more than 120 days, more than twice the usual level.

The total market subsided to 67,079 cars and trucks, 18.5 per cent below the 2008 January total of 82,270 units. It was the lowest January since 2004.

The weak result is in line with the falls seen in the last four months of 2008, when registrations dropped 11.4 per cent, 22.2 per cent and 11.3 per cent respectively in October, November and December.

Many of the people contacted were quick to point out that the figures looked worse than they really were.

“It looks like it is plummeting, but only because the first half of ’08 was so high,’’ said Nissan Australia marketing general manager Ross Booth.

“I reckon the fall is over-inflated by how much the market was up last year in January to June. Last year’s first half was extremely strong.”

Mitsubishi was also trying to stay calm. Corporate communications manager Rob Chadwick said: “We expect the market to sit somewhere near where it was three or four years ago.

“We have seen the peak (in 2007 and 2008) and have come a bit lower than it. But certainly we are not seeing a collapse. It’s a little less, but nothing overly concerning.”

Mercedes-Benz believes buyers have been spooked by the financial crisis when, in fact, economic conditions do not justify such a retreat from the market.

“People think it is worse than it is,” said Mercedes-Benz Australia/Pacific corporate communications senior manager David McCarthy.

“Perception and reality are still some way apart,” he said, arguing that buyers were more pessimistic than was warranted. “Unemployment is still under five per cent. So there is still very high employment.”

Even red-hot deals were not generating strong responses, he said.

“We have an offer on E280 Sports and CDI of $280 week with no residual risk. That’s an offer that the punters have never seen before, but they are still very difficult to part from their money. The market is not happy.”

And buyers who cannot take advantage of the current crop of extraordinary offers may find the 2009 prices set to be introduced by various manufacturers too much to bear when they finally are ready to buy.

One sales and marketing chief, who did not want to be named, said there were so many good cars for sale and so many bargains to be had.

“What is really going to be interesting is when everyone is out of all their ’08 stock,” he said. “Price increases are inevitable.”

And they will look more intimidating after the current crop of basement bargains on offer.

“No one is going to be chasing volume, so car prices in real terms are going to go up considerably. What’s that going to do to the market.”

The Japanese yen has strengthened from about100 to the Australian dollar in July to about 60 now.

“All the Japanese makers have had their margins crunched, and they will try to recoup that with higher prices.”

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