Mazda predicts stagnant new-car market in 2019

MAZDA Australia managing director Vinesh Bhindi says the overall Australian new-car market will remain flat in 2019, predicting a similar year-end sales figure to this year.

With one month to go, the market is sitting on 1,065,583 sales, which is 1.9 per cent off the pace of the same period last year.

Speaking at a media event in Melbourne this week, Mr Bhindi said there had been eight successive months of sales decline since April and predicted that the overall year-end sales tally would be 1.16 million units, or 2.5 per cent off 2017.

He said there were multiple reasons for the sales decline, but remained positive about the overall state of Australia’s economy.

“The decline is due to a number of factors that are impacting all brands such as a tightening of credit and the ability of marginal buyers to secure loans,” he said.

“The decline in house prices, particularly in Melbourne and Sydney, and now the fact that all brands are full-time importers.

“But on the flipside, the fundamentals of the economy still remain strong.

“Private and business consumption is on the increase. We have the fastest full-time employment growth in 10 years. Business confidence is at an all-time high and consumer confidence is on the up. And people are spending more of their savings, even if real wages are not growing.”

Mr Bhindi acknowledged Mazda’s own year-to-date sales drop and put some of that down to production issues stemming from the massive storms that ravaged parts of Japan in the middle of the year.

“Our sales are down 3.8 per cent year over year in a declining market as a result of some product ageing, and some supply issues we faced due to production disruptions caused by the heavy rains in Hiroshima in July.

“August was a record, helped along by the once-a-year M Day sale, and we are aiming to finish the year with just over 112,000 vehicle sales.”

Mazda launched a record number of new offerings in 2018, with new model and model year updates for the BT-50 pick-up, CX-8 diesel seven-seat SUV, Mazda6 mid-sizer, MX-5 sportscar, CX-9 large petrol SUV and the top-selling SUV in Australia, the CX-5 that was updated this month to include a new turbo-petrol powertrain.

2019 is expected to be quieter than this year in terms of product activity, but more model year updates are likely.

The all-new Mazda3 small car will start to roll out mid-year, and replaces the third-gen model that is Australia’s second best-selling passenger car.

Mr Bhindi said 2019 would be much the same as 2018, but added that the impact of changes to dealer finance regulations was yet to be identified.

“We are thinking it will probably hold and it might be 1.16 (million sales) where this will finish this year. But there are a few things that are quite unique that are coming up.

“This credit crunch as we call it, or tougher conditions from the banks, and in particular from November 1 there were some requirements on automotive dealers on how they offer finance to customers.

“I think that has got some time to settle. It is hard to predict whether that is going to be positive or negative to the market in the long run.

“We are basing our business plans on about the same market level. In terms of our sales, we are going to be above 100,000, but we are not going to lock in any number. The market will decide how many cars we sell and depending on what we bring out and what we have to offer, will be our success.”