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Car market closes 2009 with a tax bang

Bruised but victorious: Holden's Commodore was the number-one seller in Australia again in 2009, although it was bumped off by rivals in some months.

Record December sales help car industry surge back to health

VFACTS logo6 Jan 2010

THE Australian motor industry closed out 2009 on a high as it continued its second-half sales rally with a record December performance.

While overall sales for the 12 months were down 7.4 per cent on 2008, December sales were up 15.9 per cent on the same month last year to a new December benchmark of 88,708, beating the previous record of 86,250 set in 2007.

The last hurrah for 2009 was prompted by a recovering economy and a last-minute rush for vehicles prompted by federal government tax breaks for small business, which ended on December 31.

Ute sales rocketed upwards, with December sales of 4x4 utes – popular with farmers and tradesmen alike – up 57 per cent on December 2008. Prestige car sales also spiralled by more than 60 per cent for the month.

Despite the end of government incentives, the market is set retain the benefit of the tax breaks for a while yet as many new-car buyers delay delivery into 2010. Market leader Toyota – which took the sales crown for the seventh straight year – says most car companies are carrying “huge” order banks into 2010.

And most car companies are predicting that sales will maintain 2009 levels this year, before edging up towards the magic million mark in 2011.

According to official VFACTS sales figures, the Australian motor industry sold 937,328 vehicles in the 12 months to December 31, 74,836 fewer vehicles than 2008’s 1,012,164 units but well above predictions of about 850,000 units made 12 months ago when the economy was sliding into the depths of the global financial crisis.

Despite the dire predictions, improved consumer confidence overlaid with various government stimulus packages and low interest rates lifted sales to more normal levels in the final eight months of the year, culminating in the whopping 88,708-unit sales tally in December – 12,198 more vehicles than December 2008.

 center imageFrom top: Hyundai i30, Toyota HiLux, Ford Falcon, Toyota Corolla.

Federal Chamber of Automotive Industries (FCAI) chief executive Andrew McKellar described the result as exceptional, “given all the challenges and uncertainties thrown at the industry by the global economy”.

“The ‘game changing’ measure that restored confidence in the marketplace and stimulated additional demand was the bonus tax break for business,” he said.

“The final outcome for the year has surpassed the industry’s original expectations by some 57,000 vehicles and a significant proportion of this additional volume can be attributed to the tax break.”

Looking ahead, the FCAI forecasts that new vehicle sales in 2010 will exceed 940,000.

“The challenges of the past year have not yet fully passed so 2010 will be a year of consolidation for the industry,” Mr McKellar said.

Toyota was the number-one manufacturer for the seventh consecutive year, also topping 200,000 sales for the sixth year in a row. It retailed 200,991 vehicles in 2009 to secure a dominant 21.4 per cent share of the market.

This was well ahead of second-placed Holden on 119,568 (12.8 per cent) and third-placed Ford, on 96,501 units (10.3 per cent).

However, Toyota’s sales declined 37,990 units over 2008, a fall of 15.9 per cent. By comparison, declines by Holden (-8.3 per cent) and Ford (-7.8 per cent) were more in line with the average market drop of 7.4 per cent.

Hyundai was the stand-out performer of 2009, enjoying a 39.2 per cent sales rise in the year to December 31, selling a best-ever 63,207 vehicles compared with 45,409 the previous year. It also lifted its market share to 6.7 per cent, compared with 4.5 per cent in 2008.

This effort lifted the Korean importer to fifth place in the market, ahead of Mitsubishi and Nissan.

Ironically, it has just announced the sudden departure of its sales and marketing director, Kevin McCann.

Mazda sales slipped just 2.6 per cent to allow the company to grab fourth spot and hang to the number-one importer mantle with 77,739 sales. Its market share crept up 0.41 percentage points, to 8.3 per cent.

Honda was the biggest loser among the top ten car companies, dropping 21.2 per cent of sales. It finished the year in eighth place, with 41,443 units or 4.4 per cent. In 2008, it held 5.2 per cent.

Sixth-placed Mitsubishi, which has been in recovery mode since its mid-sized Magna went out of production in 2008, came storming back in December with a dramatic 60.5 per cent increase over the corresponding month last year, shrinking its 2009 12-month sales deficit to 6.1 per cent.

Mitsubishi sold 56,998 units for a 6.1 per cent share.

Nissan sales declined 10.7 per cent, to 52,901 units and a 5.6 per cent share, while Subaru volumes slipped 5.2 per cent to 36,506 units and 3.9 per cent share.

Apart from Hyundai, the only car company in the top ten to increase volume was Volkswagen, which clawed a 0.7 per cent increase, to 30,087 units (3.2 per cent).

The Holden Commodore was again Australia’s top-selling car, although it was knocked off its perch in some months during 2009 by Toyota’s Corolla and HiLux ute, which both won their respective segments.

Commodore sales were down 13.1 per cent to 44,387 units, compared with 51,093 units.

Sales of its large-car rival, the Ford Falcon, declined only 2.9 per cent as it recorded 31,023 retails for the year, but the big Ford could only manage fifth place on the sales chart, behind Commodore, second-placed Corolla (39,013 units, -18.6 per cent), HiLux (38,457, -10.5 per cent) and Mazda’s top-seller, the Mazda3 (35,293, +4.6 per cent).

The biggest sales impact was made by Hyundai’s i30 small car, whose sales have more than doubled in the past 12 months from 10,201 units in 2008 to 21,414 vehicles last year – a rise of 110 per cent.

The icing on the cake for Hyundai was the performance of its ageing Getz light car, which gained 13.8 per cent, to 19,643 units, to finish in the top ten, in ninth spot.

The top ten was rounded out by the Toyota Yaris, which summed up Toyota’s fortunes for 2009 by declining 25.5 per cent, to 19,447 units.

However, Toyota Australia’s senior executive director of sales and marketing David Buttner said today that Toyota had shunned distress marketing in 2009, instead opting to protect its resales values and current customers.

He said that in the last seven months of 2009, Toyota’s average monthly sales had improved 25.7 per cent over the first five months.

Mr Buttner said Toyota had gone from carrying “large” excess stocks in early 2009 to now carrying a record customer order bank.

He said Toyota had ordered an extra 6000 imported cars to cover its sales for the first quarter of 2010, and was also preparing to ramp up local production to cover improving export demand.

Mr Buttner said he expected Toyota to out-perform the market in 2010, although he cautioned that conditions remained “challenging”.

Alarmingly for the local industry in 2009, sales of locally produced cars again fell more than the market average, declining 13.9 per cent.

Toyota’s locally made Camry and Aurion suffered more than their Aussie rivals on the domestic market, Holden’s VE/WM models and Ford’s Falcon. Combined domestic sales of the Toyota duo were down 18.5 per cent, compared with Holden’s 13.5 per cent decline and Ford’s 6.0 per cent fall.

Imported car sales were also down, but only by 6.1 per cent.

Passenger car sales were down from 596,545 in 2008 to 540,562 last year, a fall of 9.4 per cent.

The large car segment – mostly comprised of Holden’s Commodore and Ford’s Falcon – fell at double the rate of the market, down 14.8 per cent.

The medium car market – which is dominated by Toyota’s Camry – was down 11.7 per cent.

Light cars – predicted to be one of the big winners in tough times – actually fell slightly more than the average, down 8.0 per cent.

Small cars also failed to make great inroads, down 6.3 per cent for the year.

And despite the economic doom and gloom, sports car sales rose by 5.4 per cent, although sales of the most expensive models above $200,000 declined by 41 per cent.

SUV sales were down 3.4 per cent, but this segment still managed to increase its market penetration by 3.2 percentage points to 20.1 per cent – now second only to passenger cars (57.7 per cent, down 1.3 percentage points).

Compact SUV sales held up better than most, falling just 1.2 per cent, while the medium SUV segment slipped just four per cent.

Large SUVs took a 26 per cent sales hit, but just to prove there is money in the market, luxury SUVs gained 7.0 per cent, mainly on the back of a slew of new models.

Light commercial vehicles – a major beneficiary of the government’s tax benefits – also lifted their slice of the market, up from 18.3 per cent in 2008 to 19.3 per cent, although sales volumes of these light trucks fell 2.1 per cent.

Passenger car sales were down from 596,545 in 2008 to 540,562 last year, a fall of 9.4 per cent.

2009 top car companies:
Toyota 200,991 -15.9%
Holden 119,568 -8.3%
Ford 96,501 -7.8%
Mazda 77,739 -2.6%
Hyundai 63,207 +39.2%
Mitsubishi 56,998 -6.1%
Nissan 52,901 -10.7%
Honda 41,443 -21.2%
Subaru 36,506 -5.2%
Volkswagen 30,087 +0.7%%

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