Automotive year 2005: Boom or bust!

WINNERS are grinners but which brands posted the worst results during 2005, the fourth consecutive year of record new-car sales in Australia? With 55 passenger car, light commercial vehicle and truck brands scrabbling for sales of almost one million last year, Australia could be described as over-indulged with the range, and diversity, of models available here.

Most - 43 to be exact - were passenger vehicles vying for an ever-decreasing slice of market segment and diminishing piece of the action.

There was one notable, and highly public, failure – MG Rover – and the withdrawal of a slow-burner, Daihatsu.

And considering that 24 passenger vehicle brands achieved less than a 1.0 per cent share of the market, some analysts were surprised that more marques did not bite the dust.

Despite months of media exposure in the UK about its woes, MG-Rover slid under the waves without much fanfare in Australia. The brand had been struggling for years, buyers were justifiably wary of its long-term viability, and they stayed away in droves despite some reasonably competent and individual products like the Rover 75.

All up, MG Rover sold just 270 cars in Australia last year and its 2004 tally was not much better at 566. Buyers hoping for a bargain flocked to the much-heralded public auction by Bonhams in June for the last remaining MG Rovers - MGFs, MG-ZTs and 75 Club models.

All 185 vehicles were snapped up with savings of between $25,000 and $37,000. Whether they become classics remains to be seen as the MG Rover company was sold to Chinese car-maker Nanjing Automobile for $125 million and there is speculation the Rover 75 will resurface as a Chinese-built Nanjing product.

That will do wonders for the brand’s image.

MG Rover’s fortunes follow the demise of Daewoo here on December 31, 2004, with some Daewoos resurfacing towards the end of 2005 as lightly modified, rebadged Holdens.

The jury is still out on whether buyers will warm to the sourcing of Holden vehicles out of South Korea but, based on price, the feature-packed Daewoo-built Barina and Viva are right on the money.

If early numbers are any guide they may just help the GM-Holden enterprise prosper. But, as we know, the car business is a long-haul operation.

Holden has also been sensitive to media reports that the quality and driving experience of the Korean sourced cars is no match for the previous European-sourced Barina and TS Astra Classic, which essentially was replaced by the Viva with the newer AH Astra pitching into the premium hatch arena between $20,000 and $30,000.

Future Barinas and Vivas will obviously benefit from Holden’s engineering and dynamic expertise so it is hard to view the current cars as anything but stop-gaps built to a price until newer models arrive with more thorough Holden engineering input.

The other brand to disappear was the diminutive Daihatsu marque. Known, and successful, in Japan for its Kei cars – ultra-minis – Daihatsu’s fortunes here had been on a slide with the arrival of bigger and more powerful Korean rivals, for not much more in outright money terms.

Toyota Australia announced it would pull the plug on Daihatsu in March and the brand is now in wind-down mode, with sales ending on March 2.

However, if you’re in the market for a competent small city car, expect some bargain buys.

The loss of Daihatsu will leave a hole in Toyota’s budget end of the market but the company has denied it would replace it with the youth-oriented United States-inspired Scion brand - at least initially.

Last year Daihatsu sold 3007 vehicles, down from its 2004 tally of 5016. Some other under-performing brands will be watching the woes of MG Rover and Daihatsu with keen interest this year.

In 2005 some of the notable also-rans were Saab, Proton and Jaguar, while the end-of-year report cards for Land Rover, Renault and Chrysler were far from good, despite some strong-selling individual models.

With Saab sales slipping from 2631 in 2002 to just 1510 last year, the solid Swedish brand has been hit by a lack of product diversity and too-high pricing. It is also hamstrung by only two offerings - the 9-3 and ageing 9-5.

However, Saab, now under the auspices of GM-Holden as it is owned by General Motors, may do better this year. It has addressed the pricing issue, slashing 9-3 prices by up to $8000 in recent weeks. A sub-$40,000 9-3 should do some numbers for them.

Fellow Swedish brand Volvo has also realigned pricing of its S40/V50 range to lure more buyers after an average year. The Swedes have finally learned that they cannot compete at price levels approaching the tough Germans.

Another stumbler, Malaysian brand Proton, is still effectively in start-up mode here.

It sold 2164 vehicles last year compared to 1378 in 2004 and has been dogged by quality issues with its all-new Gen II hatch - which have now reportedly been fixed in the Series II model - as well as a lack of newer product.

The new Savvy hatch and Satria three-door are on their way but the Jumbuck utility remained responsible for the bulk of sales last year.

If the Satria GTi makes it to our shores by year’s end it should create some enthusiast interest, and gain some much-needed some media exposure.

Land Rover and Jaguar are two brands going backwards and it’s not for the want of good product.

Despite having the new Discovery III, Land Rover sold 3092 vehicles last year, down from a high four years ago of 4524.

Jaguar fared worse, selling 975 vehicles last year - down from 1751 four years ago – which was surprising considering the depth of engineering and superb road manners of its range.

Renault and Chrysler are continuing a slow expansion and Renault’s slow pace proves that the Australian market is a tough one to crack even if you have great product like the Megane and its sports derivatives.

Renault sold 3301 cars last year and Chrysler sold 2479, but both companies say they are profitable.

The 300C has proven to be an embarrassing hit with the chunky sedan in short supply. Demand should remains strong for much of this year, and is expected to spike when the hot SRT-8 version arrives in August.

Much has been written about Mitsubishi too, but despite diminishing market share and the Magna runout, the brand held up well in ’05, selling 61,907 vehicles for a 6.3 per cent market share compared to 2004’s tally of 56,967 and a 6.0 per cent market share.

A full year of 380 sales this year should bolster the Adelaide car-maker’s fortunes.

Ultimately, if the lacklustre 2005 sales performances of some brands continue this year, some serious question marks may be cast over the questionable marques in 2006.