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Market Insight: Australia a world leader in SUV share

Shifting sands: Honda’s new HR-V light-sized SUV prefers Beach Road to beach action, but 825 sales within about three weeks of launch in February is a sign of the times.

Australia on even footing with US in terms of bragging rights for SUV market share


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9 Mar 2015

AUSTRALIA has long been a leading nation in terms of SUV share of the total automotive industry, and while major markets throughout the world are chasing our tail the ‘land Down Under’ is now on even terms with the US as the biggest consumer of SUVs worldwide in percentage terms.

Sales figures released by the Federal Chamber of Automotive Industries (FCAI) last week show that SUVs are propping up the Australian industry, recording 23.8 per cent sales growth in February to be 15.4 per cent ahead year to date while passenger cars were down 6.6 per cent for the month to be 5.5 per cent in arrears compared to the same period in last year’s soft market.

With more than 32,000 SUVs sold in Australia in February, the high-riding wagons – now bolstered by a flood of all-new light-sized crossovers – accounted for 44 per cent of all passenger car/SUV sales combined, or 35 per cent of the entire market with commercial vehicles included.

By comparison, in the US market which is 10 times the size of Australia’s, SUVs and crossover vehicles accounted for 43 per cent of total passenger car/SUV sales last month, or 35 per cent when light trucks are factored in – figures that show just how even the US and and Australian market are now in terms of SUV share. For the year to date, the figures for both Australia and the US are running at the same rate, while for the full year in 2014 Australian SUV sales share finished at 31.7 per cent compared to a steady 34.2 per cent in the US.

Other markets are growing exponentially, but not matching the percentage share Australia now commands, with SUVs in China – the world’s biggest auto market – rising to a 21 per cent share of all passenger car/SUV sales last year, up from 17 per cent in 2013, 12 per cent in 2010 and just two per cent in 2003.

And in the UK market which is twice as big as Australia’s, the ‘dual purpose’ class in which SUVs are categorised has grown from a 4.5 per cent share of all passenger car/SUV sales in 2000 to 11 per cent in 2013 – and rising.

Australia has experienced a long period of SUV sales growth, with eight consecutive years of share increases (to 2014) and with SUVs claiming a share of at least 16 per cent of the entire market – commercial vehicles included – since 2000.

This has increased steadily since the mid-2000s, hitting 20 per cent in 2009, 27.5 per cent by 2012 and then breaking through 30 per cent last year to finish at 31.7 per cent.

As the overall market remains soft, the swing to SUVs has become more pronounced as all segments bar the one comprising traditional full-sized all-terrain towing masters – that is, the Toyota LandCruiser and Nissan Patrol – are now running full steam ahead.

In particular, the new breed of crossovers based on compact-car platforms – classified as small SUVs by the Australian VFACTS statisticians – are leading the charge, luring buyers away from small passenger cars.

New models such as the Honda HR-V and Renault Captur have seen the segment swell to almost two dozen entrants in the mainstream category, while the Lexus NX has just bolstered the premium class.

And there are more coming, with Mazda’s CX-3 arriving next week –bringing with it expectations of significant incremental sales – and a host of other all-new models are on their way from the likes of Jeep (Renegade), Fiat (500X) and Citroen (C4 Cactus).

Sales of these city-focused SUVs are up 34.8 per cent this year after a bumper February in which a 52 per cent surge brought 9233 new registrations – not all that far from the long-established traditional small/compact SUV segment (now classified ‘medium’) that once dominated the overall SUV market and has likewise surged on the back of new entrants and a booming premium class.

Sales in this segment are up 11.8 per cent YTD after a 14 per cent boost last month (10,507 units), with the Mazda CX-5 remaining the biggest-selling SUV in the land with more than 2000 sales over 28 days of trading.

This was not, however, the biggest-selling SUV category for the month: large SUVs also recorded double-digit growth (18.7 per cent) with 11,330 sales, pushing the segment up 8.6 per cent YTD.

As LandCruiser and Patrol continued to struggle in the much-lower-volume upper-large segment, their luxury class counterparts remained in strikingly strong form, up 23.3 per cent for the month (and 19 per cent YTD).

Upper-large aside, the important high-selling segments are all firing and, significantly, now quite evenly spread, with the small, medium and large segments accounting for 9.6, 11.8 and 12.2 per cent share respectively.

For the full year in 2014, the mix was: small (7.8), medium (11.2) and large (11.5) back in 2011 when the FCAI reclassified the segments, the fledgling small segment had a mere 3.9 per cent share compared to 9.0 for medium and 10.1 for large.

The rise of these light-sized SUVs, most of which were not designed to travel off the beaten track, is shaping up to be the story of the year as far as motor vehicle sales are concerned.

And if the trends continue, the ‘land Down Under’ could soon find itself the undisputed leader and on top of the world in terms of SUV market share – though perhaps only until China, whose annual growth rate in this area is double that of Australia’s, eventually pushes past.

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