Toyota predicts market sales record in 2013

AUSTRALIA’S top-selling car-maker Toyota has forecast a new all-time total market sales record for 2013, with resurgent private sales doing all the heavy lifting.

The Japanese company projects this year’s figure will top the 2012 record of 1,112,032 registrations by about 20,000 units, despite “significant belt-tightening” in the government sector and a notable impact on business confidence stemming from proposed fringe benefits tax (FBT) changes.

Calling the projected 2013 result “remarkable”, Toyota Australia executive director Tony Cramb said private sales had driven the market to new highs this year, and were likely to account for 51 per cent of the overall tally – a percentage point growth of six points since 2009 – by year’s end.

“There’s never really been a better time to buy,” Mr Cramb told GoAuto, “because cars are relatively so cheap, and there’s so much more competition: in 2002 there were 200 models on the market, there’s now 400.” To the end of October, private sales across the passenger, SUV and light commercial segments accounted for 484,381 units out of the total of 942,547 units, representing growth of 8.7 per cent.

At the same time, business sales have dipped 0.2 per cent, rental sales are down 9.6 per cent and government sales are down a substantial 22.3 per cent.

The drop in business sales was not reflected by figures taken earlier in the year. At the end of June, sales in this part of the market were actually running four per cent ahead of 2012. According to Mr Cramb, “it’s not hard to see where the turnaround occurred”.

The blame, he said, lay squarely at the foot of the former ALP government’s proposed restrictions on FBT claims for private buyers – proposed changes which have now been axed by the new Coalition government, but which nevertheless sent a ripple through the market while they were on the cards.

“The uncertainty caused by the proposed FBT change sent business sales down 10 per cent in August and September compared with the same months last year,” said Mr Cramb. “Even October was no better – down more than 10 per cent on October last year.” The government sector, said Mr Cramb, has also seen some “significant belt-tightening” in recent years. In 2005, governments across Australia bought more than 87,000 vehicles – or nearly nine per cent of the total market.

This year, sales to governments will account for less than half the volume of 2005, he said, and a share of just 3.5 per cent. The total to the end of October sits at 33,715 vehicles out of more than 940,000 total.

It’s understood state governments such as the one led by premier Campbell Newman in Queensland have put the figurative brakes on vehicle budgets.

Mr Cramb said this false economy was not necessarily as good an outcome for the taxpayer as it may seem, saying that “extending the life of fleet vehicles for an extra year or two will not necessarily provide a better economic outcome,” because older cars fetch lower resale, and replacement purchases can not be postponed into perpetuity.

It’s worth noting that a substantial number of Toyota’s business and government fleet sales are of the Australian-made Camry and Aurion sedans.

Interestingly, it’s not just the type of buyer that is changing, but also the type of vehicles these buyers are opting for.

Passenger cars are likely to comprise fewer than 50 per cent of the total market this year – a market-first – making up just 49.8 per cent of the industry thanks largely to the boom in SUVs (up 8.1 per cent).

On a more brand-specific note, Toyota’s own sales are down a moderate 0.4 per cent to 176,922 units this year, with its total market share falling from 19.4 per cent at this time in 2012 to 18.8 per cent this year.

The company still tops a number of segments in the market, including Small (Corolla), Medium (Camry), Sports (86), Large SUV (Prado), Upper Large SUV (LandCruiser) and PU/CC (HiLux).

The Corolla is also Australia’s top-selling car in 2013, with 35,900 units registered enough to oust the Mazda3 from the top spot.

But Mr Cramb told GoAuto the continued segmentation of the market made a target of 25 per cent share increasingly difficult.

“The market is definitely changing, the structure makes it more complicated for us,” he said. “We naturally aspire to greater shares and volumes, that’s part of running a business, and I don’t think it’s (25 per cent) unachievable, but its now a stretch target.” The company will get a shot in arm between now and mid-2014 with the addition of the new Corolla sedan – to take it up to Mazda’s new-generation 3 due in January – and the new-generation, US-made Kluger.

The only noticeable hole in what is otherwise Australia’s most diverse range of offerings is the lack of a player in the booming small SUV market, sales of which are up 19.3 per cent in 2013.

Mr Cramb said there was no model locked away, but that a contender was being looked at.

“There’s a growth segment there and obviously we ask what can we do to provide a car to the group that clearly want that style of vehicle,” he said. “We’d be silly not to be considering such a high growth segment.”