VFACTS: Market slumps as Holden crashes

THE Australian new-vehicle market slumped 8.2 per cent last month with its worst February sales result since the global financial crisis 11 years ago, as Holden crashed out of sight in spectacular terms.

With just 1367 Holden cars reported as sold across the nation for the entire month, suggestions that buyers would rush into dealerships for an unbeatable run-out deal after the February 17 announcement by General Motors that it was killing off the historic Australian lion brand and leaving this market by the end of the year were clearly wide of the mark.

This was 50 per cent fewer than Holden managed in a similarly dismal February trading month last year, and pushed the former market-leading brand out of the top 10 and well down the charts, below premium marques like Mercedes-Benz Cars (2673) and BMW (2019) as well as middle-tier mainstream players with limited model lines such as Isuzu Ute (1559) and Suzuki (1423).

Results for Holden in the months ahead will be academic as remaining stock disappears and showrooms begin to close, but February’s showing was symptomatic of an underlying weakness in the automotive market that in overall terms is now down 10.3 per cent for the year to date.

The 79,940 sales recorded last month across all brands and vehicle types marked the 23rd consecutive monthly decline and the first sub-80,000 February result since 2009.

Federal Chamber of Automotive Industries (FCAI) chief executive Tony Weber said growing concerns regarding a global pandemic from the coronavirus were now among the litany of adverse factors that had dented consumer confidence since 2018, including political and financial uncertainty and environmental factors such as floods, drought and bushfires.

“In economic terms, a recession is declared after two quarters of negative growth – and this industry has now seen seven consecutive quarters of negative growth,” Mr Weber said.

“There is no doubt that this is an extraordinarily difficult time for the automotive industry – a situation sadly underlined by the recent announcement of Holden’s withdrawal from the Australian market.”

As many of the leading brands suffered significant double-digit sales downturns last month, the market leader Toyota defied the odds with an 8.1 per cent increase in sales to 17,679 units, which handed it a crushing 22.1 per cent market share.

Toyota’s HiLux (3421) and RAV4 (3375) were the two top-selling models across the industry last month, and while this marked a 22.8 per cent decline for the ute it was a happy 105.9 per cent upswing for the mid-size SUV.

Corolla (2520, +21.7%), Camry (1445, +11.3%) and LandCruiser (1162, +9.8%) were also in positive territory and among the top 10 sellers for the month.

Two other leading brands were in the black last month: Kia, which continued on its merry way and held fifth position with 5120 sales (+5.4%); and Subaru, which returned to form with improved supply lines helping it to 2603 units (+28.2%) and securing it 10th position, a spot albeit left vacant by Holden’s dramatic slide.

Mazda held a clear second but looks to be bruised by its heavy reliance on private buyers, posting 7230 new registrations for a 9.0 per cent market share but the sales figures were 21.7 per cent lower than they were a year ago.

Across the entire market, sales to private buyers were down 9.9 per cent for the month, compared to -7.1 per cent for business and -11.2 per cent for (lower-volume) government purchases. Only rental sales were up, at 2.6 per cent.

Hyundai was in third position with 5945 sales (-7.5%) – a result that depended on i30 (2152, +11.6%), Tucson (1241, +5.9%) and Kona (1150, +53.3%) – while Mitsubishi in fourth took a 35.1 per cent hit with only 5513 sales for the month – less than 400 units ahead of Kia and looking exposed as a significant load fell out of its all-important Triton ute (1673, -47.0%).

Ford was sixth with 4856 sales (-14.5%), hurting as the market’s third-best-selling model last month, the Ranger, lost traction (3202, -5.2%), while Nissan’s 3.0 per cent stumble was relatively minor by comparison, leaving it in seventh place with 3804 units.

Next in line were Volkswagen (3633, -10.7%) and Honda (3522, -8.9%), as Subaru rounded out the majors.

Mercedes’ 2673 units was a 2.2 per cent increase on the corresponding month last year, and enough for 11th overall, while an ever-strengthening BMW was right behind Benz on 2019 units (+9.3%). Audi’s turnaround was similarly reinforced with 1256 sales for the month (+6.3%) – just 111 units shy of Holden – while Lexus remained in good form with 756 sales (+2.3%).

Growth continues unabated for the Chinese brands in Australia – for now, at least – led by MG (1163, +128.0%) and with solid returns from LDV (554, +4.5%) and the lower-volume Haval (177, +98.9%) and Great Wall (103, +51.5%).

The deepening coronavirus crisis throws a shadow over vehicle supplies out of China in the months ahead, as well as from other markets such as South Korea where low stock of Chinese-sourced components is affecting domestic production and should eventually translate to delays for the Australian market.

So just as the FCAI warns that coronavirus fears are adding to factors keeping consumers away from new-car showrooms, restricted supply caused by the global health crisis looks set to curb sales even further.

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