Small is big again!

SURGING fuel prices are increasingly polarising Australian new-car buyer habits, with small and light cars booming at one end of the sales spectrum and sports utility vehicles (SUVs) and large cars softening at the other.

Car companies admit the volatility of fuel prices is the primary driver behind the shifting buyer patterns – which was reaffirmed this week in the latest VFACTS industry sales figures.

Despite this, the Federal Chamber of Automotive Industries (FCAI) remains adamant that the current lull in large-car sales will be redressed with the arrival of the new VE Commodore and Toyota Aurion V6.

The VFACTS figures reveal that in year-to-date terms, light cars have grown by 8553 units (22.8 per cent) – more than any other segment of the market – and small cars have grown 1856 units (2.2 per cent).

In contrast, SUVs are down 6729 or 8.8 per cent year-to-date while the large-car segment is down 15,106 or 21.6 per cent.

The FCAI’s government policy director Andrew McKellar told GoAuto this week that large-car sales would recover with new product launches.

"There’s no doubt that through the first part of the year there was an appreciable softening but May indicates there was not a huge gap," he said.

"Moreover, if you look ahead through the rest of the year there are a number of factors that cause us to be reasonably optimistic." Mr McKellar said there was no clear evidence the fleets were switching to more fuel-efficient cars despite a swing away from six-cylinder cars by private buyers and a massive increase in the uptake (and availability) of diesel-powered passenger cars, albeit off a low base.

The May figures show that diesel is continuing to grow, with 840 private buyers opting for oil-burners and 375 fleet buyers, bringing year-to-date private buyers to 3045, or 75.4 per cent higher than last year. Fleet diesel purchases are up 130 per cent at 1451 units this year.

As an interesting parallel, sales of hybrid cars – that is, the Toyota Prius and Honda Civic Hybrid – are also up 46.5 per cent this year among private buyers and 61.5 per cent among fleets. Hybrids attracted 186 private buyers and 173 fleet buyers last month.

"The one thing that does show up is that government purchasing is a bit slow," said Mr McKellar. "There’s no doubt, that in aggregate, government fleet purchases are down on what they were last year and no doubt that would be contributing to the impact in the large segment." Government purchases, which often favour big six-cylinder cars, have fallen a whopping 19.5 per cent this year (4800 units) compared to last year.

Month-on-month, light-car sales were up 29.2 per cent last month and small cars were up by 9.9 per cent compared to May last year.

The Toyota Yaris continues to dominate the light-car class, with 2495 sold last month compared to the Hyundai Getz (1849) and Honda Jazz (1033) in second and third position for the month (and overall) respectively.

In year-to-date terms, Toyota has racked up 10,256 Yaris sales for a 22.8 per cent market share.

Of the small cars, Ford’s Focus showed some momentum last month with 2320 sales, but the venerable Toyota Corolla and Mazda3 outdid the small Ford with 3750 and 2918 sales respectively.

The large-car slump had another significant impact on the main players – Holden and Ford – with Commodore sales off 26.3 per cent year-to-date and Ford Falcon sales off 19.3 per cent. Last month Holden sold 4362 Commodores and Ford 3388 Falcons, while Mitsubishi managed 1201 sales of its Adelaide-built 380.

Despite a massive marketing campaign and price repositioning at $27,990, the 380 appears to have found its level at around the 1200 mark. However, despite the 380, Mitsubishi’s smaller imported models lifted it into the black last month, allowing the company to make its first capital repayment to head office for some time.

In the first five months of this year, Mitsubishi’s big sedan has moved from 719 sales in January to a high of 1210 in March with February and April nudging four figures at 1011 and 1035. The Lancer sedan continues to rate well, with 1373 sold last month. The Outlander, Triton and Pajero 4WDs also performed well.

As it has done for a considerable period of time now, Ford has made up some of its missing Falcon numbers through sales of its Territory 4WD, which sold 1809 last month to maintain a dominant 31.2 per cent share of the medium SUV segment.

However, like all medium SUVs, Territory sales have softened substantially this year by 21.7 per cent.

The SUV compact segment remains a three-way tussle between Toyota, Subaru and Nissan, with 1410 RAV4s sold last month, 1026 Foresters and 1004 X-Trails.

Overall, FCAI figures showed that 83,457 cars, trucks and buses were sold last month – 497 vehicles or 0.6 per cent down on May 2005.

The FCAI’s chief executive Peter Sturrock said that given the backdrop of record high fuel prices and last month’s interest rate rise "the performance of the motor vehicle market is very encouraging".

Despite the adverse factors, the FCAI expects sales to peak close to its forecast of 980,000 – slightly down on last year’s all-time record.

Year-to-date sales totalled 383,712 at the end of May – down 11,221 vehicles or 2.8 per cent on the same period last year.

"The consumer appetite for new cars – particularly new small cars – remains very healthy and we could see the motor vehicle market regain a little ground in the second half of the year when the recently announced tax cuts take effect," said Mr Sturrock.

In contrast to a move to smaller, more economical vehicles, sales of 4x4 utes are experiencing sustained growth. The pick-up/cab-chassis 4x4 segment was up 12.1 per cent last month and year-to-date is up 10.2 per cent or 2466 vehicles.

"The strong sales of 4WD utes indicates both the continuing confidence of the business community but also that a lot of these vehicles are being bought with a view to personal recreational use," Mr Sturrock said.

Toyota remains the top-selling brand in year-to-date terms with 82,227 sales, a significant margin of 21,435 ahead of Holden, which has 60,792 sales. Ford sits in third spot with 48,496 sales, or a 12.5 per cent share.

In percentage terms Toyota has a 21.3 per cent share, with Holden and Ford on 15.7 per cent and 12.5 per cent respectively.

There are some other trends to watch.

Consumers have shown a strong preference for light and small cars out of Korea – mostly Holden’s Barina and Viva – with Korean-sourced vehicles up 30.8 per cent. In year-to-date terms Korean-sourced vehicles account for 40,223 of all vehicles sold this year, which includes Hyundais and Kias.

Both Hyundai and Kia have helped drive sales through new products and refreshed models. Hyundai sold 1849 Getz hatches last month.

Other individual marques that did well last month were Mercedes-Benz, as well as Chrysler and Mazda.

Mercedes-Benz has sold a record 5948 passenger vehicles this year – 15 per cent up from last year.

May was its best ever sales month for Mercedes with 1319 vehicles delivered for the month, an increase of 13 per cent over last May on the back of A- and B-class sales momentum.

A-class sales jumped 46 per cent over the same month last year to 136 units last month. The B-class, which was released in Australia last October, has been a strong contributor to sales, adding 87 units in May and a total of 646 units in just eight months.

The recently released six-seater R-class exceeded sales expectations last month, the model’s first full month on sale, with 43 units sold while the ML-class posted 247 sales for the month.

By contrast, BMW has sold 6210 vehicles year to date, Volkswagen 7437 (including the Caddy and Transporter light commercial vehicles) while Audi has sold 2229 vehicles.

DaimlerChrysler’s American brand Chrysler sold 745 vehicles last month, an impressive 21 per cent increase over the respective result last year, coming on the back of increasing demand for the 300C range.

With 157 deliveries last month, the 300C ranked first in the upper large segment (under $100,000), again outperforming the Ford Fairlane and Holden Statesman.

The managing director of Chrysler Group Australia, Gerry Jenkins, said the addition of the turbo-diesel 300C CRD next week would also help maintain sales momentum.

Among the Japanese importers, Mazda sold 5624 vehicles last month, 365 more than in May last year. Mazda Australia’s national marketing manager Martin Benders said the result was particularly pleasing given that "a little heat has come out of the market during the past few months".

So far this year Mazda has retailed 27,193 vehicles to be firmly entrenched in fourth position overall in the market. It expects to sell a record 67,000 vehicles this year.

Australia's top ten YTD:

Pos/Marque/Volume/Share (%)
1 Toyota 82,227 21.3
2 Holden 60,792 15.7
3 Ford 48,496 12.5
4 Mazda 27,193 7.0
5 Mitsubishi 21,754 5.6
6 Nissan 20,860 5.4
7 Honda 20,363 5.3
8 Hyundai 20,148 5.2
9 Subaru 15,182 3.9
10 Kia 9039 2.3
Source: VFACTS