Market Insight: When the going’s tough, there’s Toyota

WHEN the going gets tough, yes, the tough get going.

Well-worn it may be, but this phrase is hard to overlook when considering Toyota’s dominance in what the Federal Chamber of Automotive Industries (FCAI) last week declared as “an extraordinarily difficult time for the automotive industry”.

With the new-vehicle market down 10.3 per cent to the end of February, the market-leading brand is standing firm in terms of outright sales – up 0.5 per cent – after delivering a positive and highly impressive 8.1 per cent return last month.

What’s more, Toyota’s share of the entire market in February was a formidable 22.1 per cent, and for the year to date stands at 21.4 – up from 19.1 per cent at the same marker last year and miles ahead of the competition, with Mazda next best at 9.2 and not alone among the leading brands in shedding market share as well as sales this year.

Of course, this might be only a short-term spike, the first quarter is still to be run, the latest upturn might reflect the fulfilment of fleet orders made months earlier, and even Toyota is not immune to prospective car purchasers self-quarantining themselves amid the coronavirus crisis and other bad tidings that are dominating our news feeds.

But the figures, which we are told are more accurate than ever now that the FCAI has overhauled the reporting system, are plain for all to see and certainly worth cataloguing at a time when General Motors has given up on the previous market leader, Holden, and as the Toyota brand goes from strength to strength in the post-manufacturing era.

Toyota currently leads the vast majority of the segments in which it competes and has this year recorded impressive sales and/or share improvements in high-volume categories as well as diminishing classes where it often seems to be the only brand bucking the downward trend.

As some car-makers abandon, or consider leaving, passenger vehicles out of their showrooms altogether, concentrating on SUVs and utes, Toyota has this year found 9.6 per cent growth in total passenger car sales after a 26.2 per cent surge in February alone, with its share of this crumbling major market sector at 22.9 per cent – up from 16.4 per cent a year earlier.

Sales of the Yaris light car are up 39.9 per cent YTD after an 82.2 per cent uptick last month and leads its segment with a 27.9 per share – up from 13.9 per cent a year ago and now double that of its nearest competitor, the MG3.

Corolla is similarly having a stellar year as small cars remain the second-biggest segment in the market, deferring only to mid-size SUVs where RAV4 is blitzing the opposition. The small hatch/sedan range is up 9.0 per cent this year, thanks to a 21.7 per cent rise in February that now sees it with a 22.7 per cent slice of the segment – up from 17 per cent at this point last year and holding out a resurgent Hyundai i30 for dux of the class. 

Camry, meanwhile, remains in a league of its own with an 11.3 per cent increase last month bringing its year-on-year sales decline to a modest 2.3 per cent as its steamrolling share in a fading segment stands at 68.8 per cent – up seven per cent YTD.

The new premium-positioned Granvia people-mover is deferring to the Mercedes-Benz V-Class but adding incremental volume to Toyota’s bottom line, while its low-volume sportscars are either sold out, in the case of Supra, or biding their time, with 86, as sales ebb in line with the model cycle and the prevailing mood in the marketplace.

Toyota’s hold on the all-important SUV sector is of prime importance and here it similarly holds sway with sales up 12.2 per cent this year across all segments (+21.6% in February) and its share at 18.4 per cent – 6.6 per cent ahead of Mazda (11.8) and 1.6 per cent up from where it was at this point last year.

Perhaps most worrying for its rivals is the fact that there is plenty of room for improvement, with Toyota’s C-HR small SUV the one model that is swamped in a high-volume segment. The model is currently down 10.6 per cent this year for sixth position, with a slipping 8.3 per cent market share.

There are no such issues elsewhere in the SUV segments, where Brand T is the clear Number 1.

Crucially, RAV4 sales are up 64.7 per cent this year after shifting 3375 units last month (+105.9%) and its share has skyrocketed from 13 per cent to 22.

Elsewhere, the tale is familiar even as sales contract. Among the large SUVs, Prado is still king of the road, despite sales down 12.8 per cent, while Kluger is second with a shallower decline (-4.2% YTD) and a nonetheless rising segment share. Throw in Fortuner, which can also do better (-21.2%), and Toyota currently owns 33.1 per cent of the entire class.

LandCruiser is monolithic and last month racked up 1162 sales (+9.8%) to keep the big all-terrain wagon on even par with last year (+0.5%) – holding an 85.9 per cent share, with Nissan’s Patrol taking the rest – while its light-commercial buses and vans are likewise impenetrable.

HiAce bus sales have slipped 8.9 per cent but it still holds an 87.5 per cent share, the Coaster bus has the segment all to itself and sales-wise is up 50 per cent this year, while the HiAce van remains the one to beat (or the one from which to at least pinch a few sales) in the higher-stakes volume-selling mid-size van class, its sales down 4.1 per cent but its share on the rise to 34.4 per cent YTD.

And that leaves us with HiLux, Australia’s top-selling motor vehicle bar none when it comes to driving out of new-vehicle showrooms. Overall, HiLux sales are down 23.8 per cent YTD, or minus 29.2/22.1 when the 4x2 and 4x4 lines are split.

HiLux 4x2 has an unanswerable 35.8 per cent share of its segment, while 4x4s are another area of opportunity where Toyota must for the time being bow to Ford and its Australian-developed Ranger, which is enjoying a 5.2 per cent increase in sales this year and holds 24.3 per cent of the segment compared to HiLux’s 22.2.

Count on a continued barrage of big-budget sales and marketing activities throughout the year from both brands as they fight for top billing and bragging rights in the vital segment.

You know what the answer is “when the going gets tough…”

As if to underscore its supremacy, Toyota also announced this week that sales of its hybrid vehicles had risen 166 per cent this year to 7597 units, accounting for more than half of all RAV4, Corolla and Camry sales and representing 23.4 per cent of the brand’s total sales.

This compares to only 8.8 per cent for the same period last year and has already prompted the Japanese juggernaut to lift its full-year target for hybrid sales to “well above the original forecast of 40,000”.

If Toyota Hybrids was its own standalone franchise, this could place it among the top 10 brands, potentially above the likes of Honda, Subaru and, had the going not been simply too tough for GM, Holden.