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VFACTS: Car market still on Struggle Street

Deck hand: As most market segments experienced another serious decline last month, the mid-size van class led by the Toyota HiAce was a rare positive note.

‘Green shoots’ seen but no recovery in car sales yet as market down 35% in May

3 Jun 2020

OPTIMISM returning to the automotive marketplace in recent weeks as social restrictions under COVID-19 ease has not yet translated into a meaningful recovery in new-vehicle sales, with the industry recording a steep 35.3 per cent decline last month.


The 59,894 vehicles sold across Australia in May was more than 32,000 less than in the corresponding month last year, and although shallower than the 48.5 per cent plunge experienced in April, the industry was quick to point out that the result still marks the biggest fall in May sales since the tallying of new-vehicle registrations under VFACTS started in 1991.


Federal Chamber of Automotive Industries (FCAI) chief executive Tony Weber today pointed again to the fact that the auto sector has been ailing for more than two years – the latest result marking the 26th consecutive month of negative growth for the market – and that the coronavirus pandemic has served to further erode consumer confidence and have a “devastating effect” on the nation.


“While COVID-19 is primarily a health crisis, it has brought about an economic crisis as well,” he said.


“These are difficult times for the global and domestic economy, and this of course has repercussions for the local sales sector, including the automotive industry.


“Of key importance to the industry has been the topic of consumer confidence. The past few months have seen a contraction of household income and consequently household spending. This, combined with the uncertainty of the pandemic outcome, has severely curtailed retail activity.”


As he called for more government assistance, including an extension of the instant asset write-off scheme, Mr Weber said the combined effect of stimulus initiatives already in place and the gradual easing of pandemic-enforced restrictions had brought some optimism into the market.


He also said early starts to end-of-financial-year sales and marketing campaigns among the auto brands had sparked interest among prospective buyers.


“Anecdotally, we may be beginning to see some ‘green shoots’ in the marketplace,” he said. 


“With people venturing out a little more, dealers have advised of a slight uptick in floor traffic through dealerships. 


“Additionally, we are hearing from some brands that website traffic is on the rise – a sure sign of increased purchasing interest.”


Toyota’s dominance in the marketplace was plain for all to see, limiting its monthly downturn to ‘only’ 23.1 per cent as most other leading brands turned in 30-50 per cent deficits. Its 14,466 sales for the month was well over double that of its nearest competitor, Mazda, and worth a 24.2 per cent share of the overall market, kicked along by four of its models standing among the top five best-sellers.


These were HiLux (first, 3527, -16.1%), RAV4 (third, 2345, -19.6%), LandCruiser (fourth, 2132, -7.3%) and Corolla (fifth, 1626, -34.1%). 


Ford’s Ranger was the only punctuation mark, coming in second with 2663 sales (-33.0%) and playing a typically substantial role in the Blue Oval brand’s overall result of 3894 units. The Australian-developed ute soaked up more than 68 per cent of the total as Ford’s sales for the month fell 32.7 per cent, handing it fourth position behind Toyota, Mazda and Hyundai.


Perhaps the most striking results for the month came from those brands that bucked the trend with solid growth, or at least relatively positive returns.


BMW again found itself among the top 10 brands overall, repeating its historic feat achieved in April with a 10th placing this time around – down from seventh, but no less impressive as the volume brands set about rebuilding their fortunes with huge campaigns in recent weeks.


The Bavarian brand led the premium market with 2013 sales, down just 1.9 per cent on April last year, and ahead of Mercedes-Benz Cars which with 1777 sales was down 32.2 per cent for the month but still held 12th position in the overall market.


Notably, this was more than Holden, which is close to exiting the market and recorded only 1689 sales last month as its remaining stock in dealerships runs dry.


Others to perform well last month included Chinese brands MG and Haval, each continuing their run of solid form with 664 (+14.5%) and 207 sales respectively (+73.9%), and US truck brand Ram, which recorded 333 sales of its locally converted pick-ups (+42.3%).


There was less to admire among the leading brands that, along with Toyota, underpin the market’s performance and are now working overtime during the EOFY runout to recover lost ground.


Mazda’s second position last month came with 5661 sales, down 34.0 per cent, while Hyundai’s podium place was achieved with 4109 sales, a bleak 49.3 per cent drop on May last year. 


In fifth position behind Ford was Mitsubishi (3010, -41.2%), followed by Volkswagen (2781, -38.5%), Kia (2760, -50.1%), Nissan (2216, -44.2%) and Subaru (2023, -49.7%), which was only 10 units ahead of BMW in 10th.


Among the major vehicle categories, government incentives targeting businesses are apparent in the commercial vehicle sales results, with light (-22.9%) and heavy (-26.5%) commercials not faring as badly as passenger cars (-52.1%) and SUVs (-30.0%), and one particular segment, mid-size vans/cab chassis, producing a positive result for the month – up 1.9 per cent.


This came from notable sales upticks from a variety of models, including the segment-leading Toyota HiAce (615, +69.0%), Ford Transit Custom (219, +25.1%), Peugeot Expert (17, +13.3%) and, not least of all, the Mercedes-Benz Vito (100, +669.2%), which helped Mercedes’ Vans division to 478 sales overall for the month and to limit the damage to only -8.6 per cent. 



Every state and territory was, unsurprisingly, in a negative position, with the biggest-selling states all taking serious blows – New South Wales (-34.6%), Victoria (-41.2%) and Queensland (-33.1%).


For the year to date, the overall market is down 23.9 per cent to 332,181 units, 104,468 behind the number sold at the same point last year.


Top 10 Brands May 2020

Ranking Brand Sales Share
1 Toyota 14,466 24.2
2 Mazda 5661 9.5
3 Hyundai 4109 6.9
4 Ford 3894 6.5
5 Mitsubishi 3010 5.0
6 Volkswagen 2781 4.6
7 Kia 2760 4.6
8 Nissan 2216 3.7
9 Subaru 2023 3.4
10 BMW 2013 3.4


Top 10 Models May 2020

Ranking Model Sales
1 Toyota HiLux 3527
2 Ford Ranger 2663
3 Toyota RAV4 2345
4 Toyota LandCruiser 2132
5 Toyota Corolla 1626
6 Mazda CX-5 1479
7 Toyota Prado 1358
8 Hyundai i30 1191
9 Mazda3 1052
10 Hyundai Tucson 1019


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