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Holden predicts a million

On the up: "real price declines" over the past five years have led to unprecedented new car sales in Australia, according to Holden.

Holden proffers ‘best case’ industry sales forecast of 1.02 million in 2005

Holden logo14 Jul 2005

HOLDEN remains steadfast in its forecast that the Australian automotive market will reach one million new-vehicle sales this year.

Executive director of sales and marketing, Ross McKenzie, told GoAuto this week the "worst-case scenario" for 2005 was 990,000 units – and that the "best case" was 1,020,000.

"My guess it would be somewhere north of the million mark," he said. "It won’t be 1,100,000 as the error rate for the market is plus or minus 5000 units each month so you can work that out to 30,000 error for the year, the band of confidence you can put around it.

"It’s very hard to pick. For June it came in at 102,000 when we forecast it at 95,000, so it was 7000 units higher."Last year, the industry sold a record 955,229 new vehicles. The Federal Chamber of Automotive Industries is predicting 980,000 for 2005, which is more in line with other manufacturers.

Mr McKenzie said record low retail prices were the prime reason for the continued momentum this year.

"The pricing competitiveness in the market is driving the results today," he said.

"We’ve had real price declines for five years (so) this level of competitiveness is what’s producing the record results so far. And that’s notgoing to change in the second half of this year."Bolstered by a record June sales month in which new-vehicle sales topped 100,000 for the first time, the Aussie auto sector has sold 498,967 for the first half of this year – 1033 sales shy of half-a-million.

To date, growth this year has been 4.8 per cent over last year. A large number of new models still to arrive and the continued hold on interest rates are among the factors that should keep sales at an all-time high.

Mr McKenzie also suggested that vehicle supply exceeding demand worldwide would keep prices sharp.

"An excess of capacity (means) all the manufacturers are pushing very hard to move their production," he said.

"Specifically here we’ve got the Koreans acting very aggressively in re-establishing themselves, particularly Hyundai. And everybody’s got a mind to try and take share off everybody else.

"Whenever you’ve got this situation you’re going to see in my view more and more price competition."

Roll on 2006: Holden

AUSTRALIA has experienced new-car sales growth year-on-year since the newmillennium.

And while Holden sales and marketing boss Ross McKenzie isn’t about to make aprediction for next year – not yet, anyway – his headline-making optimism remains intact.

"Again there’s no reason why not (2006 shouldn’t be another record year)," he said.

"Everybody’s under-forecast for the last five years while we’ve had a few years where (growth) has been at 10 per cent.

"When you look at it logically it doesn’t make sense but when you look at the analysis, with prices we’ve had real decline. The absolute level of prices has been coming down.

"And this doesn’t even allow for the improved equipment (levels) in the car.

"So what you have to almost do is make a forecast at what you think will happen to prices. Surely they can’t be coming down forever (since) no business can run forever on negative price changes.

"But, frankly, even if prices were to come out at a zero increase you will still get some sort of market growth.

"Used cars are slow, used values are down and supplies are excessive, but all-in-all in the medium term the price scenario isn’t going to change.

"Which means that we’re going to continue to see in markets like this – barring some economic downturn – that overall volumes will stay strong,” he said.

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