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NEWS
Passenger vehicles in decline
Traditional family cars are the fallow ground in a fertile marketPut it down to the GFC, or the high fuel prices before that – or just as likely the SUV critical mass – but passenger vehicles are losing popularity in Australia.
Tony Weber, Chief Executive of the FCAI (Federal Chamber of Automotive Industries), yesterday highlighted the recent swing away from passenger vehicles in the Australian market at a presentation of VFACTS sales results for 2013. It's a trend the FCAI has observed since 2007. Last year was the first year that passenger cars accounted for less than 50 per cent of the total market, marking the latest low point in the market class's fall from grace since its peak in 2007.
"In 2013, passenger cars remained the largest selling category, holding 49.9 per cent," said Weber. "The SUV segment increased market share to set an all-time sales record of over 333,500 vehicles – up 8.5 per cent from last year's sales numbers. Their market share is now 29.4 per cent."
Weber said that VFACTS figures also revealed business buyers were purchasing more SUVs and fewer passenger cars. 'Business' is a broad church where car buying is concerned. The Tupperware-liveried Ford Territory and the Telstra Commodore Sportwagon are clearly company cars, but business buyers are also private buyers taking advantage of novated leasing to select the car they want, paid for directly by their employer through salary sacrifice. In essence, novated lease buyers are 'private' buyers in all but definition.
Weber also suggested that quasi SUVs (dual-cab pick-ups and other light commercial vehicles) were additionally attracting the attention of private buyers.
"Interestingly, we saw a significant increase in the purchase of light commercial vehicles by private buyers. Private sales of light commercials increased 37.2 per cent on 2012 sales."
Tony Cramb, Executive Director for sales and marketing at Toyota Australia, had this to add: "While SUVs and light commercial vehicles are achieving record sales in growing markets, part of their success is at the expense of passenger vehicles.
"SUVs tend to offer more space and flexibility, while vehicles like HiLux don't just cater for the tradies, they often double as family transport. That helps explain why, for the first time ever, passenger car sales now account for less than half the total market. The share has fallen steadily in each of the past seven years – from more than 60 per cent to 49.9 per cent.
"Over the same period, SUV sales have risen from fewer than 200,000 and 19 per cent of the market, to more than 333,000 and a share that's staring down 30 per cent. Sales of light commercial vehicles have risen more than 15 per cent over the period, and the share has grown a full percentage point.
"The number of passenger cars being sold has declined more than 11 per cent since its peak in 2007. Last year, Australians bought 70,000 fewer passenger cars than they did in 2007 – even though the total new vehicle market was 86,000 units higher.
"That's a combined boost of more than 156,000 new vehicle sales that can be attributed – mostly – to the booming popularity of SUVs."
The change in buying preference has hit large cars hardest, resulting in rapid erosion of the local sales base for Australian-built products like the Ford Falcon, Holden Commodore and Toyota Aurion. According to the VFACTS figures for 2013, Australian manufacturing saw the market turn away from products built here - to the tune of 21,286 fewer sales, down from 139,796 in 2012 to 118,510 last year.
But the story seems unlikely to end with large cars. Mid-sized cars will be affected too. With the rise of new generation compact SUVs, such as the Holden Trax and Ford EcoSport, the passenger car class may also see some shift in buying patterns at the other end of the scale, in light and small car segments.
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Written byKen Gratton
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