Market Insight: People movers set to turn

PEOPLE movers heavily based on commercial vans were once the only way to move a large family and all the associated children paraphernalia.

They were the workhorses of suburbia and though generally unloved, became the backbone to getting the family around as one unit.

Now the segment has lost much of its sales grip as multi-seat SUVs become the vehicle of choice for families, but there are still signs of strength in the family market, particularly from the new breed that have no basis on commercial vans.

The other market for people movers is in doing exactly what the name indicates – moving people as a commercial business, such as airport transfer, executive limousine transport and moving corporate members around cities or regional sites. 

Some strength has come to the segment from the federal government’s instant tax write-off that assisted the commercial side of people movers, allowing operators a welcome discount to upgrade vehicles used for tours and transit businesses.

But against that grain, the hospitality industry slumped as tourists from overseas and even interstate were held back from travel, impacting on any related business.

People movers have also been attacked from other vehicle genes, notably the SUVs of which many have seven-seat capacity, a high towing capacity and all-wheel drive, appealing to families who want to get away and need space.

With tow ratings of 2000-3500kg, the larger SUVs can generally out-tow people movers, such as the Hyundai Santa Fe SUV with a 2500kg maximum braked towing capacity compared with the Hyundai iMax people mover’s 1500kg.

People mover sales are now only 7730 units a year, falling more than 37 per cent over the past decade from the 12,655 units shifted in 2010 when they were under less threat from the SUV genre and when owning – and being seen in – such a van was more socially acceptable.

Now that SUVs have become the “must have” family car for people who want to look adventurous, the humble people movers have drifted into becoming merely transport for lots of kids.

The stigma remains that people movers are still based on commercial vans and have inherited similar comfort, build quality and roadholding manners. 

Of the 13 models of people movers on today’s market, only two are purpose-built for the task – the rest are based on a commercial vehicle.

While that may sound dismissive of the segment, few acknowledge that Australia’s most popular vehicles – the Toyota Hilux and Ford Ranger – are commercial vehicles.

Though affected by changes in consumer buying habits, it will be vehicles such as the new Kia Carnival – which, like the Honda Odyssey, is built specifically to safely and comfortably move people – that may gain buyer attention.

The latest Carnival employs much of the engineering and comfort-convenience features of Kia’s passenger cars and SUVs (notably the Sorento) but has substantial cabin space in a flexible arrangement to suit work, family and leisure pursuits.

It is also impressive in cargo capacity, with a huge 627 litres available with the three seat rows up, and up to 2905 litres with the rear seats down.

It can also seat two, five, seven or 11 people depending on how the seats are arranged and which variant is chosen (there’s a specific seven-seat executive version, for example).

Sectors within the people mover market are performing differently because the genre is divided into vehicles priced less than $60,000 and those above $60,000.

The sub-$60,000 sector has eight active players including the dominant Kia Carnival with 52.9 per cent share (3650 sales, about half of its 2019 total), followed by the Honda Odyssey (1091 sales/16.1%), and the LDV G10 (725 sales/10.7%).

For the 2020 year, this less-expensive end of the people mover market finished 42.8 per cent down on 2019, with the December month also in the negative territory by 46.7 per cent. 

The segment made 6772 sales for 2020, graphically illustrating how the segment has been ravaged by key factors including the consumer move to SUVs and the collapse of the small-van personnel transport industry.

Against that slump, the five players in the $60,000-plus people mover sector – actually only three brands but one with three models – performed completely differently.

This segment was up 35.9 per cent for the year with 958 sales, while the December result was also positive with a 3.0 per cent lift on the same month in 2019.

The three brands and respective models are Mercedes-Benz Vans (as apart from Mercedes-Benz Cars that is calculated for sales separately) with its Valente, V-Class and Marco Polo models; Toyota with its Hiace-based Granvia (replacing the Tarago); and the niche Volkswagen California that is a new model and only sold four units in the 2020 year.

One of the best movers in 2020 has been Mercedes-Benz Vans, which lifted sales of its Valente model by 75.2 per cent over 2019 while its December sales went up by 181.8 per cent year-on-year.

It has cast the potential for more people mover sales growth but in the Valente’s case, it was more to do with its run-out sale prior to a new model launch on February 21. 

Mercedes-Benz Vans told GoAuto it had dealer-support initiatives in palace to run out the remaining stock of the Valente in preparation for the new model.

The company also said most sales of the Valente – one of three in the people mover line from the brand – are made to families and smaller tourist operations.

Sales of the V-Class were slightly down 2.8 per compared to in 2019 with 411 sales for the year (2020), and the Marco Polo Activity sold 48 units for the year, up 182 per cent on 2019.

The Activity will also be upgraded on February 21 with a facelift, while Mercedes-Benz Vans will release another model – the Marco Polo Horizon based on the V-Class platform – in the fourth quarter of this year. No details of the Horizon are available as yet.

The Granvia hasn’t followed the market dominance of its Hiace donor, which in the commercial van segment has almost double the sales of its nearest rival in the 2.5-tonne to 3.5-tonne GVM van market.

Much of its slow burn is attributed to the Granvia’s relatively high price – at $64,000 to $75,000 it is more expensive than the Mercedes Valente and about $20,000 more than the entry-level Carnival.

But the Granvia is showing promise. Its 2020 sales are up 97.1 per cent on 2019 with 276 sales made in the year.