Car market softer than it seems: Holden

SALES of mainstream family cars and business vehicles so far this year are softer than headline figures suggest, according to Holden, one of the few leading motor companies with a healthy lift in sales this year.

Holden sales and marketing executive director Philip Brook said that when analysts drilled down into official VFACTS sales figures for May, they discovered that the non-premium segments across the industry were down about 6.0 per cent so far this year – more than double the overall drop of 2.9 per cent.

He said sales growth by some luxury brands such as Mercedes-Benz and BMW were helping to mask the true situation in the lower ranks, where factors such as the easing in mining investment activity and fall in consumer confidence was hurting many mainstream segments such as light trucks.

Mr Brook said May had been the softest sales month this year, with demand slowing since January and February compared with last year.

He said VFACTS sales figures for May also appeared to have been propped up by sales of dealer demonstrators and pre-ordered vehicles that were delivered last month.

“There are numbers within numbers, and it was a softer market than it looks like on the surface,” he said. “This month (June) is looking pretty soft as well.” Mr Brook said the Australian car market demand was softer than Holden had expected at the start of the year, but he did not expect it to get worse.

Left: Holden sales and marketing executive director Philip Brook

In contrast to the overall market and many of its major top-10 rivals, second-placed Holden is sailing with the breeze, its sales up 8.2 per cent for the year to date, with Commodore sales powering along at 63 per cent above last year's levels thanks to the take up of the new VF model, particularly top-end variants such as the V8-powered SS-V.

The Commodore surge reverses the downward spiral of the one-time Aussie sales champion, which is set to go out of local production in late 2017.

Private buyers currently make up a higher proportion of Commodore sales than fleet and business buyers, with more than half of the Aussie-built large cars going to private individuals – a rarity in Commodore history.

Mr Brook said Holden sales were up in all the key segments it competes in, including small cars, SUVs, light trucks and large cars.

He said the state of Holden sales reflected the recovery from the publicity blow dealt to the company last year with the announcement of its withdrawal from local manufacturing in 2017.

“It was a challenging time for all of us internally, but also for our dealer network, and they have done a great job of moving on and just getting the job done,” he said.

“We still get inquiries from people asking us if they will still be able to buy a Holden and can they get parts for their cars, but the dealers are doing a great job handling that.” Mr Brook said Holden just needed to stay focused on the core segments in which it had traditional strengths.

This month, Holden has been pushing its End of Financial Year sale, offering a wide range of incentives such as driveaway pricing, free upgrades and special packages.