Toyota on track for 211,000 sales in tough market

TOYOTA Australia says it is looking at the positives in a new-vehicle market that has just registered 13 consecutive months of decline, projecting that annual growth could come again as soon as 2021.

Speaking to journalists this week at the RAV4 national media launch in Adelaide, Toyota Australia vice-president of sales and marketing Sean Hanley stressed that the company’s market share “is on the upward trend”, with it to remain comfortably ahead of its rivals.

“This will be our 15th year of above-200,000 sales and the 23rd time we’ve been market leader, including the past 17 years in a row,” he said.

“These results are due to the confidence that consumers have in Toyota as the most-trusted automotive brand in the country.”

Toyota Australia’s market share is 18.8 per cent in the year to date – 0.3 per cent higher than it was in the first four months of 2018 – and has been above 19 per cent in seven of the past 12 months, including a result of 20 per cent last month.

Mr Hanley said that the company’s 2019 volume is on track to shrink by as much as 2.8 per cent, despite it being down by a more significant 6.3 per cent in the year to date. The latter result is better than the market’s 8.1 per cent contraction.

“We think the market overall will be much more healthy through the second half of the year through a consistency and growth point of view,” he said. “I think it will still be upside-down but not as much.

“So, when you add all those together, we’re still thinking right now a running rate of 211,000 (sales), but it could be a bit better than that. We always strive to do better.

“What we do know is our market share in the available market, from a brand health point of view, is healthy. We were growing.

“But as I say … internally all the time, ‘You can’t eat market share, right? You’ve still got to sell cars.’ But it’s not sell at any cost, it’s sell responsibly, it’s sell sustainably.

“We want quality sales … so we won’t go out and try to bust a market for volume. We just want our healthy share of whatever that market is.”

Mr Hanley said that while the Australian market is currently undergoing a correction, it is still “a good market” and its return to growth could be only two years away, even with the ongoing credit crunch.

“We’re forecasting somewhere around 1.1 million (sales) this year, give or take – it could be up or down,” he said.

“I don’t see it increasing in year 2020, I think it will stabilise, and I think the next growth period will come … 2021 (with) marginal growth, and then from 2022 to 2025, (it will take off again).

Mr Hanley said the upcoming federal election will only mean good things for the market as its conclusion will increase economic stability.

“Whatever the outcome of the election, we’re not concerned about volume or the market going forward,” he said. “We think that whatever government of the day is elected, the fact is that certainty and consistency of government of any persuasion is confidence.”

Mr Hanley said the just-launched fifth-generation RAV4 mid-size SUV will play a key role in Toyota Australia’s sales push for the rest of this year, with it to make an impact as soon as this month.

“Our May plan, we think the market will be down between 7.5 and eight per cent – we think it could even be a bit more than that … 8.5 maybe, so a bit more than I suggest – but we’re only forecasting a sales decline of 4.5 per cent,” he said.

“Why is that? Because we think the RAV4 will stimulate that market. So, we see that as a natural stimulant going forward.

“We see the Corolla sedan will stimulate that market towards the back end of the year. We see the eventual technical change of HiLux, which is quite significant, will stimulate the last quarter of the year.

“In fact, in the 18 months to December this year, we’re updating vehicles that represent more than 60 per cent of our Toyota volume.”

About 24,000 RAV4s are expected to be sold this year, which would represent an 8.3 per cent improvement over the 22,165 units sold in 2018. The model’s volume is currently 13.2 per cent down in the year to date, where it has been in runout.

Another key model for Toyota Australia is the Corolla small car, which has dipped by 23.1 per cent, to 9415 units, in a class that is down 18.7 per cent in the year to date, but Mr Hanley expects it “will be amongst the top of the tree in that segment in the next 12 months”.

“We’re not doing as strong out of the rental market as we were, but we kind of expected that, so it’s not an unplanned position for us,” he said.

“That market segment’s come back a fair bit, we know that. It’s still a big segment in volume, though, so you can’t ignore it. We still want to be a force in that market.

“When you look at Corolla, you look at Level Two and Three grades, they’re doing quite well. Level One has dropped off – that’s where the vast majority of your drop off is occurring, that Ascent Sport area, and that’s where your rental would normally go.”

The new-generation Corolla hatch launched in August last year, while its sedan counterpart will enter showrooms later this year. Until then, the existing model is in runout.

The Kluger large SUV (3650 units) has been another source of bleeding, but Mr Hanley said its 19.3 per cent decline to the end of April is “a natural part of the model life cycle”, but he stopped short of confirming when its recently revealed fourth-generation model will arrive.

“Despite the fact it may be down a bit, it’s still holding its own in that market,” he said. “It’s still a significant car for Toyota in Australia and we see a big future for Kluger.”