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SUVs eat into small-car territory

Big little problem: Mitsubishi says some customers are shifting out of light cars such as the Mirage hatch into city-friendly SUVs.

Baby soft-roader segment growing in Australia at expense of light and small cars

16 Jun 2014

UPDATED: 19/06/2014COMPACT cars – once the darlings of the new-car market – appear to be taking a back seat as buyers instead show a preference for jacked-up SUV versions.

While the cheaper end of the light-car segment has fallen 13.7 per cent in the first five months of the year, and the mainstream end of the small-car segment has effectively flat-lined with a 1.9 per cent fall, light SUVs under $40,000 are up almost 15 per cent while the equivalent luxury-badged SUVs are up 10.3 per cent.

The rise of SUVs such as the newly released Jeep Compass (up 31.4 per cent) and the recently updated Mitsubishi ASX (up 39.5 per cent) and Skoda Yeti (up 18.5 per cent) comes at the expense of once bread-and butter volume models for light car-makers in the newly created micro-car segment, including the Mitsubishi Mirage (down 8.8 cent over the first five months of this year), Suzuki Alto (down 54.2 per cent) and Nissan Micra (down 62.4 per cent).

Light cars have also been impacted, including the Ford Fiesta (down 22 per cent), Holden Barina (-33.4 per cent), Honda Jazz (-35.1 per cent ahead of a new model launch next month), the Mazda2 (-21.7 per cent, and due for replacement late this year), Suzuki Swift (-27.7 per cent) and the segment leader, the Toyota Yaris (-14.1 per cent).

Meanwhile, light-car-based crossovers are proving popular among buyers looking for a small economical hatch but with SUV styling and a higher ride height.

The Holden Trax, Ford EcoSport, Peugeot 2008 and Suzuki S-Cross are part of a new wave of sub-compact SUVs having an impact on the overall segment and taking sales away from light and small hatches.

The traditional small-car segment is also suffering slightly, with hits taken by once-strong models including Holden’s Cruze (-28.3 per cent for the first five months of 2014), the Ford Focus (-14 per cent) and Nissan’s Pulsar (-31.9 per cent).

There are exceptions, though, with Volkswagen’s Golf up 42.7 per cent to 8263 sales so far this year to be in fourth position overall and ahead of both the Focus and Cruze. The repositioned Alfa Romeo Giulietta is also up 179.5 per cent with 1065 sales year to date.

Small cars remain the most popular segment on the new-vehicle market, accounting for 23.2 per cent of all sales YTD, with the market-leading Mazda3 up 12.6 per cent, Toyota Corolla up 4.4 per cent and Hyundai i30 up 10 per cent. Between them, these four models account for more than 50 per cent of the entire segment.

The drop in light-car sales this year has seen this segment’s share of the overall market fall to 9.5 per cent – just 1.9 per cent ahead of the fast-closing light-sized SUVs (currently on 7.6 per cent) – while micro cars account for just 1.6 per cent.

Mirage is the clear micro-car segment leader but, stunningly, the Fiat 500 is now the second-biggest-selling model in the class, up by a whopping 192.9 per cent this year with 1204 sales.

Fiat Chrysler Group Australia president and CEO Veronica Johns told GoAuto that its tweaks to the 500 line-up, including adding an entry-level Pop variant to appeal to a new subset of customers, was paying dividends for the brand.

“We created models that the previous distributor hadn’t had in the market, so while it looked like a repositioning it was really a new line-up that we offered,” Ms Johns said.

Volkswagen, meanwhile, has pinned the Golf’s good fortunes on its strong acceptance in the Australian market, as well as some promotion of the model among buyers.

“It (the Golf) has been doing well for quite a while,” Volkswagen Australia communications general manager Karl Gehling told GoAuto.

“We would probably be doing even better if we could get enough stock, but we’re happy with the way things are going.”

However, Mr Gehling said Volkswagen was not about chasing outright volume.

Mitsubishi Australia head of corporate communications Shayna Welsh said the ASX’s success was part of a wider boost in ASX sales worldwide.

“Every year we seem to be making gains in that particular vehicle,” Ms Welsh said. “Last year we had the upgrade with the 2.2-litre diesel with the automatic transmission, which has obviously boosted sales over that period as well.

“We’re finding that a lot of customers do enjoy the higher ride height as well as the convenience of a small SUV, so you do see some movement out of passenger cars into SUVs.”

She said Mitsubishi’s small-car sales had also been hit hard by supply issues with Lancer over the last six months, which the car-maker said it hoped to resolve “in the next month or so”.

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