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Toyota's big bite

Eaten alive: Even Toyota's John Conomos does not believe his company's sales domination is healthy for the industry.

Toyota outsells Holden and Ford combined, but localised pain continues

Toyota logo7 Nov 2007

TOYOTA has placed another brick in the wall that separates it from every other car brand in Australia, selling more new vehicles last month than its two nearest rivals combined.

Official VFACTS new-vehicle sales statistics released this week by the Federal Chamber of Automotive Industries (FCAI) show the dominant Japanese brand racked up 20,212 sales in October, which for the first time in a single month was enough to outsell both Holden (11,415 units) and Ford (8206).

Toyota’s total delivered it an overall market share of 22.6 per cent for the month, miles ahead of Holden on 12.8 and Ford on 9.2.

The figures reflect year-to-date market share differences that place Toyota past 195,000 sales (to 22.4 per cent) – more than 71,000 sales clear of Holden (on 14.2 per cent) and 105,000 units ahead of Ford (on 10.3 per cent).

Toyota broke sales records for October trading with its new-generation Kluger SUV, which again came within striking distance of Ford’s Territory (just 17 units behind on 1173), as well as the following market segment-leading models: the Corolla small car (4123), which remains Australia’s second-biggest-seller behind Commodore despite a severe stock shortage the RAV4 compact SUV (1293) the Prius petrol-electric hybrid car (257) and the HiLux one-tonne ute (1759 for 4x2 and 1993 for 4x4).

Rather than gloating over the results, Toyota chairman emeritus John Conomos told GoAuto that the company’s strength could come at the expense of Australia’s automotive industry overall.

“The fact that Toyota outsold Holden and Ford combined last month is not necessarily a good thing,” Mr Conomos said at yesterday’s LandCruiser 200 Series launch in Alice Springs.

“At Toyota, we’re always aware that a market needs robust competition if it is to move forward very strongly. As it is, we’ll end the year with a market share of about 22 per cent.”

 center imageFrom top: Yaris, Corolla, Camry, RAV4, Kluger and HiLux (bottom).

The Toyota stalwart also predicted that the industry could now well exceed one million units for the calendar year.

“The figures ... suggest it could go as far as 40,000 beyond the million (sales mark),” he said. “But a last-minute competitive rush, as we always see in this business, could push the market perhaps to 1.1 million.” Toyota this year expects to post another record of more than 235,000 sales in Australia.

No other brand has achieved 200,000 sales in a year in Australia, but 2007 will be the fourth consecutive time for Toyota, which now has its sights set on a staggering 250,000 vehicles in 2008.

Senior executive director sales and marketing David Buttner played down the sales defeat of Holden and Ford combined last month, saying it came as a result of contrasting product cycles.

“We’re at the high point of our model life cycle,” he said. “Ford and GM aren’t, so whether we can do that again I’m not sure. It’s not something we focus on anyway – we’re 100 per cent focused on our own targets.” The latest VFACTS results will make painful reading for Holden and Ford executives, who must digest the fact that, outside solid month-in month-out performances in segments such as medium-sized SUVs and light trucks, their share of the passenger-car market eroded significantly during October.

Holden’s 14.8 per cent share (7887 units) across this portion of the market was down 19.9 per cent on October 2006, while Ford’s equivalent figure was an 8.0 per cent share (4267) – down 14 per cent over the same period, to be placed behind Mazda, which achieved its best month ever in Australia for a 10.3 per cent passenger-car share (5498) and an 8.1 per cent share across all segments for the month (7271).

With 5233 sales in October, Mitsubishi staved off strong results from Hyundai, Honda and Nissan to hold down fifth place overall, heavily reliant again on imports rather than the Australian-built 380 (1100).

Indeed, the success stories for the month rest almost entirely with imported cars as the combined market share of Australian-built vehicles dropped to just 17 per cent last month.

That figure adds further fuel to the debate over whether, should interest rates continue to climb, coffers should be boosted through the Automotive Competitiveness and Investment Scheme (ACIS) and, longer-term, whether import tariffs should be frozen.

“The local manufacturers’ share of the overall market was down to 17.2 per cent, which is a very low level for this time of year,” FCAI chief executive Andrew McKellar told GoAuto.

“Unquestionably, it is a reflection of the intense competitive pressure that is in the marketplace. Certainly, the cumulative effect of the strength of the Australian dollar over an extended period now is starting to demonstrate its impact on the competitive position of local manufacturers.” According to Mr McKellar, a move by the Reserve Bank to further increase interest rates – a decision that was confirmed this morning with another 0.25 per cent rise – would also “add to the pressure that’s in the market overall, in particular for the local manufacturers”.

“There is no doubt that the going for them is very tough in the domestic market – it’s even tougher in an export sense,” he said.

“Vehicle affordability is basically at record levels. The fact that the exchange rate impact is there is tending to suppress prices, so there is actually no real inflation in terms of vehicle prices at the retail level – in fact, quite the contrary.” As reported last week, Mr McKellar met with senior Toyota Motor Corporation executives in Japan late last month to discuss their concerns that the current tariff regime threatened the company’s viability as an Australian manufacturer.

However, this week the FCAI chief emphasised that the more pressing need was a review of ACIS funding.

“The investment that they (local manufacturers) have received through ACIS has been eroded because of the exchange rate impact, and the only way to even partially offset that would be to restore some of the value to ACIS – either through increasing the modulation rate in the program or increasing the overall level of funding that is available,” he said.

Toyota executives claim to be pleased with the progress of the Australian-built Aurion, which achieved 1831 sales last month, but the Camry (1994) and the Holden Commodore (4440) were each down more than 1000 units over October last year in their respective segments.

The Ford Falcon dropped 17.2 per cent for the month for a total of 2439 units, while Ford’s Territory (1190) was behind Toyota’s Prado (1273) in the medium-SUV segment – and less than 100 units ahead of a resurgent Kluger and Holden Captiva (1093).

Even with Territory’s 11.8 per cent drop for the month, the medium-SUV segment was up 42.7 per cent overall.

As Corolla dominated the small-car segment, which was up 8.3 per cent for the month, Toyota’s Yaris micro (2486) led the light-car segment, which incurred an 11.5 per cent increase over October 2006, with strong results from the other usual suspects – the Hyundai Getz (1896), Suzuki Swift (1197) and, in its best performance on record, the all-new Mazda2 (1193).

The compact-SUV segment was up 34.7 per cent for the month, with Honda’s CR-V (1291) within two units of the RAV4 (1293), and the Subaru Forester (1173) and Nissan X-Trail (1056) also selling well. Among luxury SUVs, Toyota’s Lexus RX (499) outsold BMW’s X5 (447) to be neck-and-neck in YTD terms.

Elsewhere, Mercedes-Benz posted 819 C-class sales for October to lead the over-$60,000 medium-car segment, a result that was well ahead of BMW’s 3 Series (468) but still sees it 1700 units in arrears YTD.

The tables were turned in the over-$70,000 large-car class, where the 5 Series (135) outsold E-class (115) but still trails the big Benz YTD. Further up the scale, the Lexus LS (55) outsold the S-class (36) and 7-series (14) combined, but lags behind the Benz YTD.

Across the entire Australian automotive industry, 89,289 vehicles were sold last month – an increase of 9359 units or 11.7 per cent on October 2006 – to break the record set in 2004 by more than 8000 sales.

In broad YTD terms, the passenger market is up 6.6 per cent, SUVs 15.5 per cent, light trucks 7.5 per cent and heavy trucks 16.2 per cent.

Coming off a weaker-than-expected month in September, the strong October result has placed the motor vehicle market up almost 70,000 vehicles, or 8.6 per cent, YTD.

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