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Market Insight: Japanese find going hard in 2014

Tough customer: Jeep’s new Cherokee has helped make the American company the fastest growing major brand in Australia in the first half of 2014.

American, German and Korean car-makers take no prisoners in brittle Aussie market

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4 Jul 2014

LEADING Japanese motor companies have struggled to make gains in Australia’s “soft” automotive market this year, losing ground to American, German and South Korean rivals in the first half of 2014.

Top full-line importer Mazda and fellow Japanese brand Subaru are the only two major companies from the Land of the Rising Sun to hold their own in the tough market that has slipped 2.4 per cent over the past six months in comparison with the same period last year.

Toyota, Mitsubishi, Suzuki and Nissan have all gone backwards, but worst of all is Honda, whose sales have slumped 34.1 per cent, according to official VFACTS figures.

Honda has sold almost 8000 fewer vehicles in the first half of 2014, losing all of the sales gains it made in the first six months of last year and then some.

Only the new Odyssey people-mover is in positive territory this year – from a low base – while new models such as the CR-V – a one-time leader in its compact SUV segment – has rolled backwards to the tune of 32.5 per cent.

At the other end of the scale, Jeep has powered ahead by 43.2 per cent, riding a wave of popularity for its Grand Cherokee. In June, the big Jeep outsold the market-leading Toyota Prado, although the Japanese vehicle retained its year-to-date lead, 8774 units to 8610.

The German brands have – en masse – swarmed up the leader board, with the prestige marques leading the charge on the back of new, more affordable models at the bottom of their ranges.

Audi has received a massive boost from its small A3 range, for which demand has jumped from 755 vehicles last year in the first six months to 2058 this year.

Audi sales have grown 18.5 per cent to 9661 units, putting it not far behind Munich-based rival BMW, on 10,856 vehicles so far this year.

BMW itself has forged ahead, up 8.7 per cent, mainly courtesy of sales gains by the new X5 luxury SUV that, with more than 2000 sales thus far, is only about 200 units behind BMW’s traditional best seller, the 3 Series.

Despite this, luxury market leader Mercedes-Benz has opened up an even greater gap over its rivals, with sales up 14.3 per cent to more than 15,000 vehicles – its highest first-half sales tally ever.

One area where Mercedes has made gains is in SUVs – a traditional weak point against BMW and Audi. The arrival of new models such as the GLA has ignited a 28 per cent lift in Benz SUV sales, to 2046 units, although is still significantly short of BMW’s tally of 4529.

However, Mercedes sold 10,624 passenger cars – about 4000 more than BMW and double Audi’s tally.

Volkswagen has continued its swift push up the sales charts this year, with a strong showing by the Golf helping to lift VW volumes by 3.3 per cent.

Local hero Holden has cast off the gloom of its local factory closure announcement last year by forging a 10.1 per cent gain in sales so far in 2014.

The Holden charge has been led by the model that its parent General Motors will axe in 2017, the Adelaide-built Commodore, which is finding favour with many private buyers in its latest VF generation.

Commodore sales are up a handy 58.8 per cent over last year, to 16,355 units, while sales of the related Caprice have jumped 78.4 per cent, to 603 vehicles.

Even sales of the Holden Ute has leapt 26.2 per cent, to 3135 units.

The icing on the Holden cake has been the Korean-built Trax small SUV, which has added 3220 sales in a new market segment for the lion brand.

South Korean sister brands Hyundai and Kia are making steady headway, with sales up 3.4 and 0.2 per cent respectively.

Hyundai is on target to break the 100,000-unit barrier this year, which should place it just behind its rival for the import vehicle crown, Mazda.

Year to date, Hyundai has sold 49,597 vehicles, while Mazda has found owners for 51,910 units – a difference of just 2313 cars.

Both companies say they are concentrating on their own game – growing sales at a sustainable and profitable rate – and are not willing to throw money to grab the ascendency. However, it could get interesting in December.

Apparently lost in no man’s land is one-time market leader Ford which – despite having a critically acclaimed model range – continues to slip down the greasy pole, lately by 5.1 per cent.

It has some new models coming – including a facelifted last-hurrah Falcon and Territory SUV range – but late in the year. In the first six months of this year, the Blue Oval’s heroes have been the Ranger ute and Kuga compact SUV, but all of its other volume sellers – Focus, Falcon, Territory and Fiesta – have suffered.

One thing is for sure: the market is showing no signs of getting easier, with widespread discounting and special offers continuing unabated after the scheduled end of the traditional end-of-financial-year sales.

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