Aussie market bouncing back?

All the sales growth in the Australian market over the past six years has just evaporated. Mazda's National Sales Manager, David Hughes, says that the local market for 2009 is right on track -- for 2003.

After years of record sales growth, 2009 marks a downturn in the size of the market. There are still two months to run -- and they should show strong sales, thanks to the government's investment allowance for small businesses -- but Hughes predicts the overall market will be no higher than about 895,000 units for the full year.

"The total market is currently running just under 12 per cent down, year on year," says Hughes. "The last time the industry recorded these levels was back in 2003, where it recorded 909,000.

"We do expect a stronger finish in this final quarter and still predict an overall market somewhere around about 895,000 for the year."

2009 has been a period of adjustment for Mazda. While it was afflicted by the same loss of consumer confidence as the rest of the industry, the importer has enjoyed a couple of rays of sunshine during the year. June was its best month ever for sales, and back in March, the runout of the previous generation Mazda3 was so successful that the company had to bring forward the launch of the new model. Most importantly for the company, its market share has risen during the downturn. This was in accordance with the company's strategy and leaves Mazda confident that it can retain that share once the market bounces back in a sustainable way. 

"We come out of this downturn in a better position than [we went] in," said Hughes during the press conference for the Mazda3 Diesel. "At the end of October, our market share has improved -- from 7.8 per cent to 8.3 per cent..."

The big loser in this, says Hughes, is Toyota. During the past 12 months, when the market slipped back 11.7 per cent, the 'Big T' lost 21 per cent share. Mazda, in fourth place, is probably going to stay there. Hughes says that it would be tough for Mazda, a full-line importer, to overtake Ford, a local manufacturer. Mazda must also remain wary of Hyundai, a company that could conceivably overtake the Japanese company in this market.

Put it to Hughes and Mazda MD Doug Dickson that Hyundai is enjoying the fruits of improving brand image and -- while they don't actually disagree directly -- they both throw in Hyundai's "aggressive pricing" as the major element in the Korean firm's progress up the sales ladder.

"Hyundai, still 9400 units behind Mazda, have improved their position to fifth," says Hughes. "Their relative improvement is well ahead of everybody else. It appears that their exchange rate advantage and aggressive pricing is working for them."

Hughes, looking forward, believes that consumer confidence has returned to the same levels as 2007, the last full year of a strong sales environment.

"Feelings about economic conditions in the next five years... are now at a 10-year high. It appears that consumer confidence is being restored."

Hughes explained that for Mazda itself, the company has revised its pessimistic sales target of 68,000 units for this year back up to 74,000 -- still a 5000-unit shortall against 2008, but also Mazda's third-best performance on record.

Dickson put the Australian market's 'shocking' slump in 2009 into some historical perspective. A 10 or 11 per cent slide for 2008 and 2009 compares favourably with some other periods in recent history.

"That actually pales by comparison to the 35 per cent setback that we saw between '85 and '87 and the 17 per cent setback we saw in 1991 -- so we have got off very lightly this year.

Dickson and Hughes broadly subscribe to the same market prediction foretold by Ford President, , who sees two strong months to end 2009 (thanks to the 50 per cent investment allowance), followed by a 'softer' first quarter and a rebounding second quarter in 2010.

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