April VFACTS: Why passenger cars won't sell

Official April sales figures released by VFACTS have revealed that passenger cars are seemingly in terminal decline.

The Holden Commodore has been the highest profile loser in sales this year, but plenty of other cars in the market class have contributed to the downturn.

In April, total sales of 82,930 vehicles amounted to a shortfall of just 205 sales, year on year. And with total year to date sales of 374,468 vehicles the market remains on track for another record-breaking year.

While the market has risen by 11,988 sales for the first four months of 2018, however, passenger cars have declined by 10,776 during the same period. It's tempting to blame the passenger-car sales slump on Holden's transition from locally-built VF II Commodore to the imported ZB model, but Holden's large car has contributed 'only' 3863 of those lost sales, year to date.

Toyota Camry, also locally manufactured until October last year, has lost 1609 sales, year to date, and the V6-engined Aurion has come up short another 748 sales. Add in a few hundred sales of Holden Cruze and Ford Falcon built in 2016 and the total comes to 6765 for locally-built cars – less than two thirds of the year-to-date passenger-car sales decline in 2018.

So there are other passenger cars that are falling short of their sales targets in 2017, and the market is only as strong as it is currently due to surging SUV and light-commercial-vehicle sales for January to April.

By market segment, micro and light cars are holding steady for the year so far, and small cars are only behind last year's figure by 80 sales. Even people movers are only 31 sales behind the 2017 figure.

Medium cars have taken a bloodbath however, losing over 4000 sales for the year to date, and large cars – mostly due to the Commodore – have lost a similar number.

Ford's medium car, the Mondeo, has gone backwards, as has Honda Accord, Kia Optima, Mazda6, Subaru Levorg, Subaru Liberty, Volkswagen Passat, and of course the Camry. Higher priced medium cars, including Audi A4, Infiniti Q50, Jaguar XE, Lexus IS, Mercedes-Benz C-Class and Volvo S60/V60 have all lost ground in year to date sales.

Camry has naturally suffered the largest drop, but the cumulative effect of the market turning away from medium cars has cost the segment 2554 sales for the first four months of 2018.

In large cars, it's more of the same. Commodore must shoulder the blame for the biggest sales loss, but the segment – which was less than half the size of the medium segment this time last year – has shrunk further again. Names like BMW 5 Series, Genesis G80, Jaguar XF, Lexus GS, Mercedes-Benz E-Class, Skoda Superb and Toyota Aurion have all been party to sliding sales.

So what's the story? None of these cars mentioned are duds, yet each car's respective sales decline tells a different story.

It's all about the further fragmentation of the market. SUVs are on the rise, as is well known, and many sales of the higher-riding family wagons are now cannibalising sales of passenger cars to the point where SUVs now regularly outnumber passenger cars for sales.

But also a telling point, sports cars for the first four months of 2018 sold 6816 units in total – compared with 9124 units for the same period in 2017. That's over 2300 fewer sports cars on our roads, year on year. Most of that decline was among the cheapies, below $80,000.

Mustang, Cascada, Veloster, MX-5 and Toyota 86 were the worst affected, but there was also some serious change in buyer sentiment for BMW 4 Series, Z4, Infiniti Q60, Jaguar F-TYPE, Mercedes C-Class coupe and others besides.

Some of the vehicles named are in runout, but there's little doubt that the segment's overall decline is an echo of what's happening worldwide. People would rather buy SUVs or LCVs than traditional sedans, hatches, wagons, coupes and convertibles.

Few other than purists and traditionalists will care however. Certainly not the car industry itself, as long as each individual member of the FCAI (Federal Chamber of Automotive Industries) have an SUV or an LCV to sell.

"The market dynamic has changed with the growth of SUVs but brands have adapted quickly to that change and the new products coming into those growth segments clearly have strong consumer appeal," explained FCAI Chief Executive, Tony Weber, as quoted in a press release.

But even SUVs are not immune to disruption by models from a different class, it seems. The only SUV in the sales top five last month was the Toyota Landcruiser. Four vehicles outsold the LandCruiser for the month, two LCVs and two small passenger cars.

As of April, the top 10 brands for the year to date are: Toyota (69,112), Mazda (37,472), Hyundai (30,700), Mitsubishi (26,723), Ford (23,213), Holden (20,100), Nissan (18,789), Kia (18,781), Honda (18,146) and Volkswagen (17,705). Of the top 10, only Mazda, Ford and Holden sold fewer cars than for the same period in 2017.

Top 10 vehicles for the month were: Toyota HiLux (3596), Toyota Corolla (2979), Ford Ranger (2796), Mazda3 (2261), Toyota LandCruiser (2018), Hyundai i30 (1903), Hyundai Tucson (1816), Mazda CX-5 (1725), Mitsubishi ASX (1706) and Toyota Prado (1699).