Mazda predicts new-car sales "bloodbath"

Mazda says another perfect storm is brewing for new-car buyers. According to the brand's local arm, an oversupply of vehicles arriving at the end of the year – typically a time when dealers like to clear stock for next year's models – is likely to generate the best deals since the aftermath of the Global Financial Crisis.

Shiploads of new cars are heading our way as Japanese brands (including Toyota, Subaru and Mazda) replenish stock lost during parts supply restrictions in the wake of the tsunami and earthquake in March.

Sharp deals by these three big brands will likely force others – who may not have been affected by the interruption to parts supply earlier this year – to discount so they don't get stuck with old stock going into 2012.

Backed by a strong Australian dollar (currency prices were locked in before the Aussie dollar began its rollercoaster ride this week) there'll be even more room for negotiation than usual.

"Production has come back much quicker than we all expected," says Mazda Australia managing director Doug Dickson.

"Most brands have full capacity and full production coming through. The next three months is going to be a bloodbath. Bring it on."

Dickson said there will be "more aggressive trading conditions than normal".

"It happens anyway at the end of every year, and there will be a lot of guys I'm sure eager to claw back the share they might have lost in the tsunami and earthquake," Dickson told motoring.com.au.

"It's essentially very good because the more activity and the more advertising in the marketplace, everybody notices, and they all come and have a look and buy cars."

Dickson said the new car market is likely to finish just over 1 million units, about 3 per cent below last year and only the fourth time a seven-digit figure has been reached in a calendar year.

"Right now we understand consumers lack confidence… The challenge for the industry is to be good enough to extract some funds from consumers. They've actually got more funds to spend but it's being spent on other things, [such as] housing and personal balance sheet repair. Retail is struggling to get a share of it, but the money's there."

Dickson is also the first to forecast next year's industry-wide sales: "We're still looking for 1 million in 2012".

"Depending on who you talk to, the economy is either an opportunity or a huge threat," he said.

"Only weak growth is expected for many advanced economies but still generally robust growth for emerging developing economies, and that's good news for us.

"The IMF is predicting above trend world growth in both 2011 and 2012.
But most markets are pre-occupied with the prospects of a global meltdown … either triggered by the Euro zone debt or even a US recession.

"Most commentators agree that while those risks are tangible there's probably low probability and it's still too early to call. On the home front what we understand is that the resources boom will deliver even more wealth to Australians in 2012."

Mazda is on track for another all-time sales record in Australia in 2011. When asked if Mazda might overtake Ford this year, Dickson said: "Where we sit in the marketplace is irrelevant … We don't focus on anybody else."

Ford Australia is on track to post its third year in a row below 100,000 sales – and the lowest tally in more than a decade. Meanwhile Mazda says it expects to sell 87,000 cars this year, up from 84,777 in 2010 and a record.

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