The Australian new car market has bucked retail trends with official sales figures for the calendar year 2012 showing that sales were up by 10.3% to 1.112 million units eclipsing the previous 2007 pre GFC sales record (1.05 million units). As in the past couple of years SUVs remain the fastest growing segment of the market with sales up 25.3% over the previous year.
Sales of locally made Holdens fell by 7.2% and Fords by 12.7%, with Toyota sales of locally manufactured vehicles increasing by 29.3%, largely driven by Camry sales.
Imported brands Mazda and Hyundai are now selling more vehicles than Ford for the first time and have relegated Ford to 5th position. Economic commentators often refer to a "patchwork" economy; in the new vehicle market we can definitely see this at work.
Top Ten Brands
- Toyota – 218,176 (up 20.1%)
- Holden – 114,665 (down 9.1%)
- Mazda – 103,886 (up 17.6%)
- Hyundai – 91,536 (up 5.2%)
- Ford – 90,408 (down 0.9%)
- Nissan – 79,747 (up 17.4%)
- Mitsubishi – 58,868 (down 3.7%)
- Volkswagen – 54,835 (up 22.6%)
- Subaru – 40,189 (up 18.2%)
- Honda – 35,812 (up 18.9%)
Top Ten Vehicles
- Mazda 3 – 44,128
- Toyota HiLux – 40,646
- Toyota Corolla – 38,799
- Holden Commodore – 30,532
- Holden Cruze – 29,161
- Hyundai i30 – 28,348
- Toyota Camry – 27,230
- Nissan Navara – 26,045
- Toyota Yaris – 18,808
- Ford Focus – 18,586
Biggest Losers
- Holden – down 9.1%
- Mitsubishi – down 3.7%
- Ford – down 0.9%
FCAI Chief Executive Tony Weber was quoted as saying that: "filling back orders which had built up after the natural disasters in Japan and Thailand, and highly competitive finance deals from the manufacturers helped spur record breaking sales at a time when other retail and manufacturing industries are floundering"- further evidence of our "patchwork economy".
At Moore Stephens Automotive we cannot but help think about the old retail automotive adage: "volume is vanity, profit is sanity".
As quoted in Drive in December 2012, one senior industry figure noted that franchisors "encouraging dealers to register cars as demonstrators in order to reach official sales targets and collect factory bonuses could be inflating the market by as many as 250,000 cars".
Despite the record figures "there is a feeling that the market is being supported by factory incentives and bonuses, rather than demand by customers" (Sydney Morning Herald 5/1/2013).
In the Australian Financial Review we are being reminded to "mind the growth gap", with Australian GDP growth slowing and domestic income stalling as commodity prices fall and mining capex plateaus...and government spending tightens...the economy's hopes will rest on housing and non-mining business. Indeed, maybe in 2013 we should be minding the "growth gap", that is, will housing and non-mining bridge the difference in expected growth rates.
The RBA's official central growth for GDP is "a little below 2.75% over 2013 before picking up to just under 3% over 2014".
At Moore Stephens Automotive we expect 2013 vehicle sales to soften to about 1.05 million units, noting that the new vehicle retail markets will continue to be underpinned by aggressive franchisor campaigns including finance incentives, relatively low interest rates, the fact that car affordability is at its best levels in decades and expected strong employment but also minding the "growth gap".
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