Market insight: Battered Toyota set to retain crown

TOYOTA Australia’s annus horribilis is set to end on a high note as it carries an insurmountable sales lead to the end of 2011 and its ninth consecutive annual Australian motor market crown.

With a 50,000-vehicle lead over second-placed Holden to the end of November, the Japanese company could cruise to the finish line, although it shows no intention of doing so.

But for the first time in eight years, Toyota is set to fall short of the 200,000 sales milestone this year. Instead, the company is likely to close out the year with about 186,000 sales – about the same as its 2003 total – if it achieves its usual 20,000 or so sales in December.

So far this year, Toyota sales are trailing 2010 levels by 14.3 per cent, with its market share slipping from 20.4 per cent to 17.9.

According to Toyota, the various disasters endured this year by the company (and other Japanese manufacturers to varying degrees) have cost it about 25,000 sales, which would otherwise have pushed the brand’s volume above 210,000 units for the 12 months.

In a year that Toyota would rather forget, Toyota started 2011 with a dented quality image after numerous safety recalls around the world in 2010.

Left: Toyota Camry, Holden Cruze, Ford Falcon, Mazda3, Nissan Pulsar.

Crippling floods in Queensland – a Toyota heartland – and lingering economic problems that shook the confidence of big corporate fleet buyers – another Toyota strength – also hurt sales in the wake of the global financial crisis.

Things became decidedly worse when the March earthquake and tsunami crippled Toyota production, not only in Japan but at plants all around the world dependent on Japanese-made parts.

Toyota Australia’s Altona plant was not immune, having to cut Camry and Aurion production for weeks, as did the company’s Thai factory that produces its HiLux ute – the best-selling light commercial in the land and number-one seller outright in several states, including Queensland.

Toyota sales plummeted as stocks dried up, reaching their nadir in June when – at 12,514 units and 41 per cent below the previous year’s levels – Holden overtook its nemesis for the first time in years.

Toyota fought back as stocks started to flow again, but promptly walked into another door in the shape of industrial action over a fresh enterprise bargaining agreement at Altona.

The dispute escalated into strike action on two days a week, along with an overtime ban.

The company brought the matter to a head by forcing a secret ballot of workers over a pay offer, but came away with a black eye when a majority of workers rejected it, forcing a higher offer that ultimately was accepted.

The timing of the Altona dispute was problematic, as Toyota needed to build run-out stocks of Camry ahead of the factory shutdown for a full-model change in November.

Instead, it ended up well short of Camrys in the last few weeks of the model’s life, and workers ended up not only with big pay rises but with an offer of bonuses to get the new model up and running on time.

With the dispute over, things were just getting back to an even keel when the heavens opened in Thailand, drowning much of that country’s manufacturing capability.

While Toyota’s HiLux factory escaped the deluge, parts suppliers were not so fortunate, and once again Toyota found itself with a dry supply line for one of its biggest sellers just when it was in hot demand, immediately after a major facelift.

Toyota finishes the year with the new-model Camry rolling off the production line and HiLux shipments restored, but these models will not greatly affect the result in 2011.

Instead, they will help to give the market leader a fast start into 2012 – a year that begins with Camry and – barring other disasters – ends with an all-new Corolla, with a lot of other new models in between.

While Holden had Toyota in its crosshairs in mid-2011, the widening gap in the past few months indicates the American-owned company still has a way to go to catch its rival, however wounded.

To the end of November, Holden sales were running 5.4 per cent behind last year’s year-to-date tally, and its share had dropped from 12.9 per cent to 12.5 per cent.

It is unlikely to make up that leeway within a month, but it is pulling out the stops to avoid the embarrassment of its top-selling large car, the Commodore, from being dethroned by the Mazda3 after 15 years at number one.

Of the three local manufacturers, Ford suffered the smallest drop this year, down four per cent, with its market share slipping again from 9.3 per cent to 9.1 per cent.

The Blue Oval brand suffered the ignominy of trailing importers Mazda and Hyundai in some months this year, but went into December with its nose in front, in third place.

It will be hoping that its refreshed model line up, including Falcon, Territory, Ranger and Focus, will give it the legs to keep it that way in 2012.

Mazda and Hyundai’s battle for the full-line importer crown is set to go right down to the wire, and the victor might end up being the company that is willing to dump the most cars into the market – or into dealer showrooms.

Both companies had a November year-to-date market share of 8.7 per cent, with Mazda just in front on 80,985 sales for the 11 months, compared with Hyundai’s 80,150.

The pretender to the importer throne, Nissan, has made up ground on its rivals this year, with sales volume rising 8.4 per cent and its market share jumping from 6.0 per cent to 6.7 per cent.

However, it still trails Mazda and Hyundai by about 20,000 units, and with new mass-selling models such as the all-new Pulsar and Altima a year or more away, it will take a big effort to achieve the company’s publicly stated target of 10 per cent market share and importer leadership by the end of its 2012 financial year.

This year, the overall Australian automotive market is set to power past the one million sales mark again this year – a remarkable effort considering the curve balls thrown at it in 2011.