Australia’s automotive industry heavyweights predict new vehicle sales will once again eclipse the magic one million mark in 2012.
But Federal Chamber of Automotive Industries CEO Ian Chalmers admits the Australian-made Holden Commodore – the country’s most popular new car between 1996 and 2010, but beaten by the Mazda3 in 2011 – may never return to top spot, as new-car buyers continue to abandon traditional large family cars.
“The market is being driven by lifestyle choices that consumers are making,” Chalmers said. “The clear preference for consumers is towards small, economical city vehicles like the Mazda3, and for SUVs. SUVs are replacing the big family six as the new family car, that is the trend.”
“I think that the trend line is well established and for the foreseeable future it [the dominance of small cars] is likely to continue.”
Just 10 years ago, almost one in every four vehicles sold in Australia belonged to the large-car category, with 190,303 sales recorded in 2001. Last year, large cars accounted for just one in every 13 vehicles sold, and the segment shrunk to 78,077 vehicles.
Small cars now dwarf the large-car segment in Australia. The category that includes the Mazda3, Toyota Corolla and Holden Cruze made up 24.2 per cent of all new vehicle purchases in Australia in 2011, representing 244,090 cars. Light cars (13.1 per cent, 132,442 sales) and compact SUVs (12.0 per cent, 121,387 sales) are also well clear of the large-car class.
Australia’s three vehicle manufacturers all produce a large car and are all heavily reliant of the sales success of these models. All three took a big hit in 2011, placing more pressure on the companies and increasing the uncertainty surrounding their viability in the short- to medium-term.
Sales of the Ford Falcon hit their lowest levels on record in 2011, down 36.5 per cent to just 18,741 units. Just eight years earlier in 2003, Ford sold 73,220 Falcons across the country – almost four times last year’s number. Falcon Ute sales also dropped 25.1 per cent last year to 6814 units.
The decline of the Holden Commodore was less severe: the sedan and Sportwagon variants slipped 11.6 per cent to 40,617 units, while the Commodore-based Utility lost 16.8 per cent, falling to 9489 sales. Like the Falcon, however, Commodore sedan and wagon sales are a shadow of what they were in past decades, when they peaked at 94,642 units in 1998 and 88,478 in 2002.
Toyota’s large car, the Aurion, limped to just 8915 sales in 2011, representing a reduction of 24.2 per cent compared with the previous year. Toyota Australia says it has “much larger aspirations” for the new model, which is set to hit showrooms in April. Though never enjoying the same popularity as its rear-wheel drive compatriots, the Aurion has dropped almost 60 per cent from its 22,036-vehicle record just four years earlier.
Despite the continuing exodus from large cars, Chalmers said he was confident of the continued survival of all three local manufacturers. “I have no reason to expect that there will be any reduction in the number of manufacturers in Australia.”
He said the local industry was becoming more responsive and more flexible, but admitted the decisions of local manufacturers would need to continue to be driven by consumer preferences for it to remain competitive.
Chalmers described the FCAI’s one-million-plus sales projection for 2012 as “cautiously optimistic”, and explained it was based on the current strength of the market and the potential for growth through the release of pent-up consumer demand.
But like 2011, which was hit hard by natural disasters in Japan and Thailand, 2012 won’t be without its challenges for the industry.
Chalmers estimates the introduction of the Federal Government’s carbon tax will cost the Australian automotive industry between $30 million and $50 million, and said this cost would mostly be absorbed by the three local manufacturers rather than by consumers.
Toyota Australia executive vice president David Buttner said his company expected to cop a large proportion of new industry cost.
“It’s a challenge,” Buttner admitted. “For Toyota alone, we’re looking at approximately $115 per vehicle and a potential cost impost of $20 million.
“We just have to continue to strive for better ways of manufacturing, improve our productivity and production efficiency, improve the utilisation of every resource we have.”