Magic million tipped after record first quarter

THE Australian automotive sector showed no signs of weakening last month in the face of rising interest rates and petrol prices.

Fuelled by sales increases at Ford and Mitsubishi, it smashed more sales records and maintained the booming motor industry's momentum toward reaching one million new-car registrations come December 31.

According to VFACTS figures from the Federal Chamber of Automotive Industries (FCAI), more than 86,000 vehicles were sold last month – 0.4 per cent up on the previous record set in March 2004.

Sales for the first three months combined were running no less than 4.5 per cent ahead of the first quarter of 2004.

The FCAI’s official forecast remains at 980,000 for the full 12 months – almost 25,000 clear of 2004’s all-time record of 955,215 vehicle sales – however some auto powerbrokers including Holden sales and marketing director Ross McKenzie believe the ‘magic million’ could still be reached.

In analysing the statistics, FCAI chief executive Peter Sturrock emphasised there were signs of a softening in demand for large passenger cars in favour of the small and medium segments, perhaps in response to fuel and interest rate rises.

Offsetting this to some extent was the continuing strong demand for 4WDs, or SUVs as VFACTS categorises them, however Mr Sturrock added there were further indications that softening business conditions were affecting sales of commercial vehicles.

At the end of the first quarter, light truck sales were down 4.2 per cent.

"It would have been reasonable to expect that the recent interest rate rise and the current record level of petrol prices might have taken some of the steam out of the market, however that doesn’t appear to be the case," Mr Sturrock said.

"Having said that, any further rate rises or petrol price rises are likely to have an effect on sales – if not total volume then probably the type of motor vehicles which are purchased." For the second month in a row, Holden was the top-selling brand and for March sold 16,032 vehicles – a mere 364 units ahead of Toyota, which continues to hold overall market leadership with an 18.7 per cent share (0.4 per cent ahead of The General).

Low stock levels have hurt the Japanese giant, which nonetheless this week placed a positive spin on its sales performance.

"Toyota’s first quarter results were very encouraging considering our sales volumes have been somewhat constrained by the run-out of the old model HiLux," said Toyota Australia’s executive director of sales and marketing, Dave Buttner.

"We are confident about the sales prospects of the new model HiLux and believe that once it reaches full supply we’ll regain our traditional strength in light commercial vehicles, leading to an improvement in our sales position as a whole.

"We (also) expect our SUV sales position to get stronger as the year goes on, thanks to the release of limited editions of Kluger and RAV4 next month and the launch of two important new 4WD models, and an upgrade for a current model later in the year." Having produced its best first-quarter sales result since 1990, Ford continues to hold its ground as the third most popular brand in the land, with 12,000 sales in March and a 13.6 per cent overall market share year-to-date.

Indeed, the Blue Oval’s first-quarter total of 32,300 sales is up 6.1 per cent over the same period in 2004 – not bad considering total growth for the entire sector is 4.5 per cent.

Mazda is holding down fourth position in market share terms with 7.4 per cent – up 1.3 per cent YTD with its sales rising 27 per cent over the first quarter in 2004 – though after another strong month in which it won 7.8 per cent share (compared to Mazda’s 6.7 per cent for the month) Mitsubishi is closing in with a 6.9 per cent share YTD.

Mitsubishi’s sales have risen 19.4 per cent over the same period in 2004.

"The improvement has been shared across a number of products," explained Mitsubishi Motors Australia president and chief executive, Tom Phillips.

"We are expecting that these results will give us another significant lift in market share this month (April), and this would be the sixth increase over the last seven months. A 30 per cent sales lift on last month, and a 22 per cent increase on March last year is a fantastic boost for all of our staff and dealer body.

"Things have really turned the corner," he said.

Nissan, which is struggling, holds sixth position after the first quarter with 6.0 per cent (down 0.6 points YTD), ahead of a resurgent Honda on 4.9 per cent share (up 1.0 points YTD), Hyundai on 4.7 per cent (up 0.5 points YTD) and Subaru on 3.8 per cent (up 0.1 points YTD). Kia rounds out the top 10 on 2.8 per cent, 0.2 percentage points ahead YTD.

Interesting trends continue within the segments with the seemingly entrenched lacklustre performance of large cars and luxury cars curbing overall growth in passenger cars to 3.3 per cent YTD, and the unrelenting growth in medium 4WDs – need we again mention Ford’s Territory? – forming the backbone of a 16.2 per cent rise in SUV sales overall.

Year to date, small cars are up 12.9 per cent, medium cars 12.2 per cent, light cars 6.0 per cent, people-movers 28 per cent, prestige cars 8.2 per cent and sports cars 18.9 per cent, with large cars down 10.3 per cent and luxury cars 12.7 per cent.

A close battle for line honours in the small segment is being waged between Toyota’s Echo and Hyundai’s Getz, while the all-important small-car segment – one of the main drivers of the auto sector’s current boom – shows the Corolla, Mazda3 and Astra neck-and-neck.

The sizeable gap between Commodore and Falcon in the large-car segment is also narrowing somewhat – the former is still 10.2 per cent clear on 43.8 per cent market share YTD, but compared to the same period 2004 is down 2.3 per cent while Falcon is up 0.8 per cent.

The 2.4-litre Camry still dominates the medium segment, as does Holden’s Monaro among the sports cars and Honda’s Accord in the prestige set. Luxury cars remain a BMW/Benz affair, while in the people-mover department Honda’s Odyssey is closing in on Kia’s Carnival and proving a decent market still exists out there for premium MPVs.

Among the 4WDs, medium SUVs have increased 47.5 per cent YTD and compact SUVs 10.4 per cent, though large SUVs are down 8.1 per cent and luxury SUVs 16.1 per cent. The usual suspects dominate their respective fields.

Breaking down the light truck segment shows all categories other than pick-up/cab-chassis 4x4s (up 0.2 per cent) have recorded negative growth YTD, with 4x2s down 3.6 per cent, vans down 11.6 per cent, light buses down 44.5 per cent and 2.5 tonne trucks down 31.7 per cent.

The big trucks, meanwhile, are up 12.5 per cent YTD.