Stragglers reveal plans at last, mostly...

Passenger-vehicle importers faced almost unprecedented market volatility last year. An effective buyer strike at the end of 2008 was compounded by a consumer credit crisis in the making. Add to those the prophecies of higher unemployment and stronger inflation, and the car industry was pushed in one possible direction only -- discounting prices heavily to clear excess stock.

The federal government did what it could to reignite consumer confidence, but arguably, the tax incentives for small and big business further confused an already unclear situation. Moreover, the precipitous peaks and troughs of international currency exchange rates served the purposes of some importers and distributors better than others'. Many car companies found themselves suddenly bereft of stock at different times throughout the year -- typically, just when there was a demand for it!

But that wasn't the case for all importers. Some companies are currently advertising clearance sales for 2009 stock. Consequently, some companies have too much stock, others have too little and a very few are profitable or breaking even through micromanagement of their logistics. Some of those companies have 'right-sized' their inventory by reducing prices to 'institutionally' low levels that leave nowhere else to go in reducing prices further.

The Carsales Network had previously canvassed the plans of the passenger-car importers and brought that report to you, but a small number of companies remained unwilling or unable to divulge how the tariff reduction would be handled and what impact it would have on the final price of the product range in the dealer showrooms.

Here's where we stand now:

Ford, clearing stock of '2009-plated' vehicles at the time of writing, is reducing retail pricing of its imported passenger cars, the Fiesta, Focus and Mondeo. But the price 'roll-back' is conducted in symphony with the change of specification for 'prestige paint' -- formerly an extra-cost option, now a 'no-cost option'.

Manufacturer's list pricing for the light-segment Fiesta is reduced by amounts between $320 and $820, with the 'prestige paint' option now costing zilch. Prior to the end of '09, the paint option cost $320 over the base price of the car, so that change from extra-cost option to no-charge option is the least amount that the Fiesta has been reduced in price -- provided you're ordering a car with metallic paint. The Fiesta ECOnetic, introduced as recently as December, has changed in price by the prestige paint option cost alone. If you ordered that car with prestige paint in December rather than after January 1, it would have set you back an extra $320.

The Focus pricing has dropped by an amount ranging from $820 to $1120 and, once again the prestige paint option now comes at no cost. Only the 'Electric Orange' option for the XR5 Turbo (around $1800) remains an extra-cost paint option in the Focus range.

Pricing for the Mondeo has also been wound back by sums ranging from $400 to $1850. As for the other two imported passenger car ranges, prestige paint is now a no-cost option for the Mondeo, but the nett difference there is $400, versus $320 for the Fiesta and Focus.

Ford has raised the price of the locally-built Falcon and Territory passenger cars by $400, but as for the imported cars, the prestige paint is now a no-cost option and since it previously added $400 to the final price of the car, the difference is effectively zero, unless the post-January 1 cars are ordered in non-metallic colours. The Falcon Ute has risen in price by $200, but the change of status for the prestige paint option (cost $400 previously) now means the Utes are effectively $200 cheaper than before, for those buyers who order the cars in metallic colours.

It's a relatively cost-effective tactic for Ford at a time when the company is juggling differing levels of demand for its imported range and cost competitiveness from rivals. The Fiesta, a strong seller for Ford in its latest model, will shortly move production to Thailand, which will favour Ford against light-car-segment rivals from South Korea and possibly India.

There's no confirmation as to the source of the new generation Focus small car, but rumour has it that Australia will accept supply from another Asian country, possibly Taiwan. Australia was supposed to manufacture the third-gen Focus, leaving the former originating country, South Africa, to build the Aussie-developed T6 Ranger replacement.

The Euro-sourced Mondeo will continue to be at a disadvantage against Asian-built competitors, which is most of them.

Just this morning, Volkswagen revealed that it would adjust the prices of most passenger-car models in its range. The Polo light-car entry remains priced as is, but in run-out ahead of the new model launch. In the small-car segment, the Golf has dropped back $1000 for the 90TSI and 118TSI or $1200 for the 77TDI and the 103TDI.

Furthermore, VW has reduced the prices of metallic and pearl effect paint options by $200 to $500. This pricing tactic has been adopted for the same options in the New Beetle and Jetta ranges -- reduced $200 to $500 -- but the manufacturer's list prices for the cars themselves have not changed.

The Eos convertible has come down $1000, as has the Passat CC -- with the swoopy sedan also available with the option of metallic and prestige paint $300 cheaper than before ($700 over the cost of the base car).

Currently holding the position of tenth largest selling brand in Australia, the German company will be looking to improve overall market share. Unlike companies such as Mazda and Hyundai, which could conquest sales from Toyota, Volkswagen has to forge its own way ahead without the luxury of snaffling sales from other companies to the same extent.

But the future's looking positive for VW, on the whole. At the very least the new Amarok will 'pick up' market share previously unavailable to the importer.

That leaves just one passenger-vehicle importer clutching its cards close to its chest. South Korean importer Hyundai is yet to announce how it plans to avail itself of the reduced tariff -- if it will do so at all. After a stellar sales performance last year, 2010 might prove to be an anti-climax for Hyundai. Nobody working for the importer is prepared to reveal anything, but if the company does revise its pricing or specification, it will most likely be with the intention of maintaining product competitiveness, rather than anything else.

Hyundai advises that its stock situation is not a factor in its marketing strategy moving forward. The company isn't holding a glut of stock and nor is it scratching around for extra supply to feed unrequited demand. In a couple of ways, the importer has sailed through the Global Financial Crisis with luck on its side. At the tail end of the GFC, the Won has lost value against the Australian dollar faster than the Yen has, leaving Hyundai more room to negotiate -- both between the importer itself and its dealer network, and between the dealers and the buyers.

Hyundai was also fortunate in entering the GFC with relatively lower levels of stock than a lot of importers. The reason for that pertains to a strike among Hyundai's factory workers mid-2008. That strike hampered the importer's ability to deliver cars to meet the local demand, but as demand began to dry up in the face of community concern about jobs, credit, interest rates, etc, the importer was let off the hook and the factory didn't hold it to orders placed already -- orders the factory hadn't been able to meet anyway, thanks to the strike.

So, as it stands at the moment then, Hyundai remains in a strong position in the local market, but with no mention of any designs to tailor the pricing and specification of its product range in line with the lower import tariff, it remains the enigma in the local market.