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Market Insight: Magic million sales tipped again in 2012

More of the same: Australia's car industry is looking forward to another million sales this year.

Cautious auto industry looks on the bright side as it wrestles with CO2, carbon tax

5 Jan 2012

AUTOMOTIVE industry chiefs have forecast another million-vehicle market in 2012, despite question marks over proposed mandatory CO2 emissions standards and the upcoming carbon tax.

Speaking at the announcement of the final 2011 sales figures today, Federal Chamber of Automotive Industries (FCAI) chief executive Ian Chalmers said the outlook for the 2012 sales year was best regarded as cautiously optimistic.

"2012 will require a concerted and collaborative effort by the industry and government to drive the automotive sector in this country forward," he said.

"Top of agenda is the need to finalise a CO2 emission standard in this country, with this industry having led the charge by delivering significant gains in fuel efficiency over the past decade.

"With the automotive industry having led the charge with substantial efficiency gains, we now look forward to the Australian government working with us to set ambitious, but realistic and achievable, CO2 emissions standards for Australian vehicles.

"During 2012 we'll also closely watch the impact of the introduction of the carbon price. We anticipate the cost to the Australian automotive industry will be around $30-50 million - a cost that will largely be born by the industry, rather than consumers.

"More than 60,000 industry jobs rely on the successful management and implementation of the process to offset the carbon price-induced financial strain facing Australian automotive manufacturers, and it's our intention to see this through."

128 center imageLeft: Toyota Australia executive vice president David Buttner and FCAI chief executive Ian Chalmers.

Mr Chalmers pointed to Toyota's recent $300 million investment in its Altona engine plant, last year's launch of the Ford Falcon EcoLPi gas variant and the commencement of local production of the Holden Cruze as key events from 2011.

He cited as significant the fact that in each of these cases, "Australian manufacturers convinced their global parent companies to invest in Australia - and that's no easy task".

Mr Chalmers said 2012 will see the FCAI "reinforce to policy makers the pivotal importance of co-investment programs that provide Australia with the ability to compete for and win manufacturing assignments, including further low emissions vehicle programs”.

As we have reported, Australian sales figures for 2011 finished at 1,008,437 - which was down 2.6 per cent on 2010 and below original FCAI projections of 1.05 million sales.

However, natural disasters both here and abroad – most notably the Japanese Tsunami and Thai floods that devastated supply lines for many brand's local operations – made this an "exceptional result", Mr Chalmers said.

This sentiment was echoed by Toyota Australia executive vice president David Buttner, whose company topped local sales charts for the ninth consecutive year despite being among the worst hit by these disasters.

"Toyota dealers were often competing with both hands behind their backs," he said. "Our ability to meet the demands placed on us was tested to the limit."Toyota recorded 181,624 sales in 2011 – down 15.4 per cent on the previous year - with Mr Buttner stating that production disruptions wound up costing the brand between 20,000 and 30,000 sales.

Mr Buttner said Toyota saw positive signs for the brand during 2012, citing low interest rates (a counter to instability in Europe), moderating inflation and a slew of new models set for introduction, including the Camry Hybrid and Prius C by March, the all new Aurion in April and the 86 sportscar in July as key factors.

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