Camry comes to Toyota's rescue

Toyota has averted a third consecutive year of dwindling sales in the Australian market with a last minute charge to the finish by its locally-manufactured mid-size sedan, the Camry.

The extraordinary result for Camry – 5321 sales during December – ensured that Toyota crossed the line with 206,236 sales in hand, placing it 2735 units ahead of its 2014 sales tally.

Camry usually sells between 1000 and 2000 units a month, so the December figure was exceptional and unprecedented. The massive sales spurt was due to a dealer incentive program and zero per cent finance, according to Tony Cramb, Toyota Australia's Executive Director for Sales and Marketing.

And the timing helped push Toyota over the line to achieve a higher sales volume in 2015 than in 2014. Cramb says that Toyota sales had fallen behind during 2015 for a number of reasons, but mostly due to rapid changes in its product portfolio.

"2015 was a tricky year for us; because we changed over 70 per cent of our volume... that means run-outs and run-ins – and that can be very complex. And if you overlay HiLux on top of all of that, it's very challenging for a sales and marketing operation. So to come through all of that and sell more than we did last year, we're very happy."

Camry also sold in larger than expected numbers during November – 3025 sales for the month, versus 1981 in November 2014. By the end of November, Toyota was barely 500 sales ahead for the year to date, overall. If not for the extra Camry sales during the last two months of the year, Toyota would have found itself in the same position as the other two local manufacturers – Ford and Holden – selling fewer cars than the year before, despite the bumper market.

Cramb explained that Toyota dealers had been encouraged by the incentive program to buy wholesale stock of the Camry in larger numbers than usual. Many of those cars will serve out their time with dealers as demonstrators, before being sold to consumers with a zero per cent finance offer during the first quarter of 2016.

And during the final stages of last year the Camry also picked up retail customers buying new cars on zero per cent finance. The combination of dealer incentive program and zero per cent finance created a 'perfect calm' for Camry to set itself a new monthly sales record in December.

"Dealers made a judgement on the number of vehicles that they would use as demonstrators in the first quarter..." Cramb explained.

"We've got a really tricky transitional program to undertake, so to make sure your suppliers have certainty to the end of 2017 we need to continue the volume at a healthy pace. As we approached the fourth quarter, we were slightly behind where we thought we needed to be...

"But actually the program... was far more successful than we had anticipated. We didn't for a moment plan a 5000 Camry number, but the dealers were so motivated by what we could do for them that they chose to take advantage of it to that degree.

"But having said that, at the same time the zero per cent offer was going crazy... so it was a strong combination of the two."

Cramb admitted that Camry's higher sales were not sustainable, but Toyota is looking at ways of keeping the locally-built sedan ticking over at a respectable order rate right through to the plant closure. Including exports the Camry needs to be holding steady at an output of around 90,000 units a year from the Altona plant right up to the end of local production in 2017.

Zero per cent finance is likely to play a significant role in that, and selling demonstrators to dealers from time to time will provide further impetus.

Selling demonstrators to dealers is a time-honoured way of moving sheet metal and improving the on-paper sales numbers. Many car companies in Australia have indulged in the practice at some time or other in the past. Both Cramb and FCAI Chief Executive Tony Weber defended the practice of including demonstrators in the sales aggregate.

"Our demonstrator percentage is the lowest in the industry," Cramb told motoring.com.au. "If you look across the whole year, and you look across all the models, our percentage of demonstrators is under five per cent. That is what you need to run an effective motor vehicle business..."

"The reality is every car sold in this country has a VIN [Vehicle Identification Number]," said Weber earlier. "And a VIN can only be registered once.

"If [a demonstrator] did go out the door to a [retail] consumer in January it couldn't have been counted officially in [VFACTS] numbers [for the same year]. The reality is you cannot rob January for December – and get away with it forever..."

The FCAI boss and the Toyota exec concurred that the practice in 2015 is not the cause for concern it once was. There were fewer demonstrators sold to bump up the numbers in 2015, so the claim goes, than has been the case previously.

"It's part of our business actually," Cramb continued. "And dealers and consumers like to buy demonstrators as well..."

"I would like to clarify that we didn't stuff vehicles into our dealers. That's for sure... there's no way we would do that ever."

While retaining a massive lead over second-placed Mazda in 2015 – a margin of over 92,000 vehicle sales in 2015 – and enjoying market domination for 13 consecutive years, Toyota's market share has eroded since around the time of the GFC.

"I don't see it as a problem," Cramb told motoring.com.au. "I think it's wonderful in a number of different ways. Firstly, for the customers in Australia to have such choice is fantastic for them. It shows that we have seriously good competition in many segments, and it also shows that the market itself is changing, by its very nature.

"There are segments like small SUV, where we don't even have an entrant. That's a big segment now; it didn't even exist when we had 20-plus [per cent] share. The market itself is changing; it's moving away from the big six-cylinder traditional family car. It's moving into small cars and SUVs.

"Small cars, we're doing great, pick-up trucks we're doing great, SUVs we're doing great – but there are segments of that market that are growing that we're not even represented in..."