Market Insight: Car-makers mull first-half sales

AT THE halfway point of the year the Australian motor vehicle market is again on record pace, up 3.3 per cent on the same period last year and almost 5000 units ahead of the first half of 2013, when the industry went on to post an unbeaten 1.136 million new registrations.

The same mass-market brands all figure among the top 10 this year, but the dynamics have shifted as Toyota – on 101,714 units – holds firm out in front of the pack while Mazda (56,591) reclaims second position from Holden (51,737), Hyundai builds incrementally (to 50,099) and a fascinating four-way battle emerges between Mitsubishi (35,866), Ford (34,810), Nissan (32,950) and Volkswagen (32,020) in the quest for a top-five position.

Subaru continues to impress with its more limited model range, holding on to ninth position (21,659) in the face of a resurgent Honda which has recorded 20,602 first-half sales – a rise of 33.4 per cent compared to last year and by far the biggest percentage increase of the leading brands.

Volkswagen is the next biggest improver, up 12.1 per cent year to date and now just 3847 units away from outright fifth. Only six years ago, VW was in 10th position at this point with less than half as many units to its brand name (15,934).

Ford, on the other hand, has suffered the biggest sales fall this year, down a worrying 17.6 per cent across the bulk of its range – not just its long-suffering locally built models – while Holden has turned in the second-deepest decline, dropping 8.9 per cent over the first half of 2014.

These are stunning figures when you consider the power and influence these two brands have historically wielded in the Australian new-vehicle market, reducing the red lion and blue oval to either fight like wild dogs to keep their place in the pack – or simply submit to the new order.

When was the last time Ford was outside the top five brands at the halfway point of the year? Answer: Never.

Indeed, Ford was essentially a ‘permanent’ member of the top three until only a few years ago, eventually deferring to its one-time junior partner Mazda, as well as Hyundai, at the halfway mark in 2012.

Three years on, Mazda and Hyundai now have their hooks into Holden. Mazda has climbed 9.0 per cent this year to be 4854 units clear of The General, while Hyundai, at the other side of Holden, is up a more modest 1.0 per cent YTD but just 1638 sales behind.

Hand the Korean brand a one-tonne ute and a city SUV, or perhaps simply give it a little more time with the model range it has now, and Holden could well follow Ford in dropping out of the top three – a position it, too, has never found itself in at significant points such as the halfway mark or in a full year.

Nissan is the only brand other than Ford and Holden in the top 10 to be in negative gear this year, down 0.6 per cent. Mitsubishi, meanwhile, has risen 9.8 per cent to claim a top-five spot.

With so much competition across these major brands there are no certainties that the top 10 will be in the same order by the end of the year – with the obvious exception of Toyota, still to be miles in front of everyone else despite its growth clipped to 0.6 per cent YTD.

Simply doubling the first-half results would be to overlook restocked budgets and potentially savage sales and marketing activities in the marketplace over the next six months – whether coinciding with all-new or upgraded models, or not – as well as economic, political and other issues outside the industry’s control.

It would also be unwise to characterise Ford and Holden’s significant sales declines this year as a backlash from buyers against their forthcoming Australian factory closures and job cuts – more a vindication, really, of each company’s decision given the high quality and value of the locally built models that are nonetheless still on a downward trajectory.

Toyota, after all, is leading nine out of the 14 segments in which it competes, and is either second or third in four of the other five categories.

In the large SUV class, Toyota is once again first AND second, while the recently upgraded Australian-built Camry – to be sourced from an overseas factory from late 2017 as Toyota likewise pulls out of local manufacturing – is also up 3.0 per cent this year.

Participation in key segments, perception of quality, model desirability and marketing cut-through – when the buyer is ready, these are among the critical factors behind the sale and, come December 31, will count for plenty in determining whether or not the top-selling brands can improve on their first-half performance.