Holden and Goliath

HOLDEN admits it has woken the sleeping giant – Toyota – by snaring its second month of market leadership this year, which has delivered a record first-quarter result for the Melbourne-based car-maker.

Executive director of sales and marketing, Ross McKenzie, warned that although the result was strong, he expected Toyota to answer its rush for top spot with a range of incentives and deals.

"I have no doubt that I’ve woken the sleeping giant. And I’ve got no doubt they’re going to come out of the blocks pretty hard," Mr McKenzie said.

"If you look at the results across the board, in fact the numbers show that Toyota has actually gone backwards on a number of car lines, which I thought was quite interesting."Mr McKenzie concurred that Holden and Toyota were shaping up for a battle for Number One this year in a market that could hit a record one million sales.

As with last year, the extraordinary growth in the market is coming from the SUV segment, which is up 16.2 per cent on last year at 46,650 for the first quarter versus 40,000 for the same period last year.

The passenger segment is also contributing with first quarter results of 147,000 units coming mainly off the back of the small car segment, which is up 12.9 per cent on last year.

Mr McKenzie said Toyota’s Achilles heel had been HiLux, which was on runout, but was also feeling the pinch with some of its other models.

"What I’m encouraged by is the amount of momentum we seem to have across all the car lines," he said. "It isn’t just an Astra thing, the fact of the matter is we’ve had record sales on just about every car line.

"In Toyota’s case their HiLux numbers are down 27 per cent, but their Corolla numbers are down nine per cent and Kluger three per cent, so they’re showing negatives in a few areas.

"Now, we did come out of the blocks with a fairly aggressive retail program and I’m sure they’ll do the same."Mr McKenzie said he was encouraged by Holden’s passenger car strength in January and February.

"For two months in a row we’ve sold in absolute terms about 6000 units and we’re probably short about 1000 a month in some of our LCV product so I think we’re in the territory we need to be in to be a market leader contender," he said.

"I think it’s going to be a very exciting year ... you could put money on the magic million."According to the VFACTS figures released last week, Holden sold 16,032 vehicles in March, taking the total first-quarter sales to a company record 43,437 vehicles.

The strong results were underpinned by record first quarter sales for light truck leader Rodeo. Holden sold 2446 Rodeos last month, a total of 6423 for the quarter, cementing market leadership and record sales in the light-truck segment for the quarter.

Holden’s ute range also dominated, with 4701 sales, up 288 units over the Falcon ute year-to-date.

The company achieved its best ever first quarter light-truck sales of 11,386 units, up 6.3 per cent on the 2004 record, compared with volume declines for Ford and Toyota. The Lion has 30.9 per cent market share in the segment YTD, up from 27.9 per cent last year.

The Astra achieved its highest first-quarter sales of 8738 units (including convertible), and 2928 last month. The Barina managed its best first quarter result since 2002.

Buoyed by its small car success and consistent sales for Commodore, Holden maintained its top position in the passenger segment with market share of 21.1 per cent YTD.

However, Holden and Toyota experienced declines in market share for the first quarter compared the same period last year, with Holden down 0.6 per cent points to 18.3 per cent.

Mr McKenzie (left) said the industry’s first quarter record of 237,000, a 4.5 per cent increase year on year, reflected intense competition.

"The industry record is a strong indication the Australian market will reach one million sales this year," he said. "Other positive signs in the economy, including historic low unemployment at 5.1 per cent and strong business spending, bode well for the industry."The continuing low cost of finance was also bolstering car sales, he said.

Mr McKenzie also acknowledged that strength in the market had also derived from importers, which have enjoyed the benefit of the tariff reduction and some price benefits as a result.

"So you’re seeing gains from the likes of Mazda and Hyundai and some of the luxury marques, who have all gained market share in the first quarter," he said.

"The dynamic is very interesting when you see that we’re able to achieve the market leadership with a number of 18.5 per cent whereas in the past you would have had to have in excess of 20 per cent market share.

"The market share is getting more divided between the players."

Daewoo Lions

Holden believes it can maintain sales momentum with its small cars, supplementing its range with Daewoo cars as the Polish-built, old-generation Classic sedan and hatchback ends production later this year.

"The Classic departs the scene in pretty much a seamless transition to move into the Daewoo product," said sales and marketing boss Ross McKenzie.

"That transition to the J-car product out of Daewoo, we think, will give us enough momentum to keep the numbers going."

No setback for VE

General Motors’ decision last month to abandon certain North American passenger cars built on Holden-engineered Zeta rear-drive architecture will not affect the forthcoming VE Commodore, according to Mr McKenzie.

The VE series, which is based on the Zeta architecture, is still due for release in about 12 months.

"The (General Motors) Zeta decision doesn't affect the local decisions in any way," Mr McKenzie said. The engineering side of things were local investment decisions for Commodore. The development of the plan here and the (global) program was entirely around the Commodore requirement. We were going to have a global vehicle line engineer (Gene Stefanyshyn) ... who at the last minute didn’t come. He would have come here and begun work on the specific engineering requirements for the US program so the cancellation of the program doesn't have any bearing on us in that respect."

Slow Adventra sales

Holden blames production schedules rather than consumer disinterest as the main reason behind slow sales of its V6-powered Adventra 4WD wagon.

"Unfortunately, we launched the V6 and we haven't had any supply – we’ve only just started production," Mr McKenzie admitted. "Our start-up in the plant has been delayed on all of our all-wheel drive products so we've had no Crewman, production, Cross8 production and Adventra production up until basically the start of this month (April).

"It’s just a matter of getting the plant going from last year with all the changes in the layout of the plant significant changeover issues, and just a matter of priority of what the plant could get going and focus on getting Commodore and long-wheelbase going followed by station wagons and utes and now getting the focus on Adventra, Cross8s and Crewman."