VFACTS for May: Blue skys from hail storms

Hail storms across the country have contributed to an improving outlook for the Australian automotive industry.

Subaru MD, Nick Senior suggested at the launch of the Forester 2.0D earlier this week that the replacement of hail-damaged vehicles might have been worth as much as an extra 40,000 to 50,000 sales for the year to date. More than a few of those transactions would have been new-car sales.

It's difficult to apportion how much the general insurance industry is propping up the automotive sector, against the continuing fulfilment of demand, fuelled by tax incentives for small business. Many importers are still scrounging around for supply from the factories to meet orders placed before the end of last year -- six whole months ago.

With the importers playing catch-up, industry statistician VFACTS has reported a record-breaking month of sales in May. The Federal Chamber of Automotive Industries (FCAI) states that VFACTS figures for last month show a total figure of 89,218 vehicles sold. That's an 18.3 per cent improvement on the figure for May 2009 and surpassing the previous record (May 2008) by 578 units.

"This is a record May result and shows the new vehicle market is maintaining a strong sales momentum," FCAI Chief Executive Andrew McKellar said.

"All vehicle segments increased during the month, demonstrating a genuine recovery in the marketplace."

SUV sales for the month were up by 28.9 per cent, year on year, passenger cars rose 19.4 per cent and light commercial vehicles picked up 6.4 per cent. Those percentages translate to SUV sales of 20,065, passenger-car sales of 50,450 and an LCV figure of 16,283 for the month.

"It is encouraging to note that private buyers have returned in larger numbers during May (up 27.2 per cent) taking over some of the momentum that business buyers have provided over the past year," McKellar said.

After five months of unbridled growth in 2010, it's clear that the local automotive industry has left the GFC in its wake. With 422,446 vehicles sold for the year to date, the growth rate over the GFC-affected first half of 2009 is running at 19.9 per cent -- compared with a 19.2 per cent slump for the first five months of '09, versus the same period in '08. This strongly suggests that industry pundits predicting a million-plus year in 2010 are on the money.

"Toyota expects prevailing economic conditions, the halt on interest-rate increases and the end-of-financial-year deals to lift the 12-month total over one million," said Toyota's senior executive director sales and marketing David Buttner.

"A further reason for confidence is that June totals in each of the past three years have exceeded 100,000 sales -- even in the face of economic turmoil -- and have been above 96,000 every year since 2004.

"Regarding the full calendar year, the industry is also on track for one million sales; however, the potential impact of economic conditions, movements in interest rates and the impending Federal and Victorian elections remains unclear."

That was the considered view of the country's best-selling brand. The view of Holden, the brand selling Australia's most popular car, was no less positive.

"People continue to respond to our diverse model range across Commodore Sedan and Sportwagon," said Holden's Executive Director of Sales and Marketing John Elsworth. The Commodore, with a relatively low figure of 3899 vehicles for the month (still an improvement over May of '09), retook market leadership during May, but Holden was just as thrilled by its result for the Captiva SUV.

"Captiva sales were up more than 100 per cent from the same month last year, with 1411 vehicles sold," Elsworth said.

Among the prestige importers, Mercedes-Benz had reason to crow, outselling both Audi and BMW for the month.

"To achieve three straight months of sales leadership is extremely satisfying and [a result] that the entire team at Mercedes-Benz cars can feel enormous satisfaction with," said Benz MD, Horst Von Sanden.

"We repositioned the B-Class earlier in the year and the sales results in May saw it lead the class and [it] has cemented its position as third in its class YTD. With five months of 2010 gone we are within 30 units of the total sold in 2009."

Highlights for the German brand include the M-Class outselling BMW's X5 and the S-Class retaking the lead in its segment from BMW's 7 Series. The company's E-Class range holds 53 per cent market share in its segment, despite on-going stock shortages. To date, Benz has accepted 50 orders for the SLS AMG super sports car and hopes to have 70 orders in hand before the end of the year. There's a further hope on top of that -- that all 70 will be delivered by Christmas.

Back with Subaru, the Japanese importer has enjoyed significant sales growth, both in monthly and year to date stats. Total sales of 3610 for the month represent growth of 21.8 per cent over the 2965-unit figure for May 2009 and in a year to date comparison the importer's tally of 17,043 is 1791 units (11.7 per cent) ahead of the figure for the same period last year.

May was an all-time record for Subaru, "smashing our previous month of May record by around about 12 per cent," said Nick Senior.

Forester sales were down about 277 units for the month, but the launch of the diesel variants are expected to turn that result around in coming months. Tribeca sales were also down, but every other model in the range enjoyed growth for May. Impreza (pictured), with stock shortages cleared up, posted a record sales figure of 1597. Outback, bolstered by the availability of the diesel model, nearly doubled its sales performance, year on year -- from 247 units in May '09 to 481 units last month. The latest generation Liberty, in its first full year on sale, is also well ahead of last year: 415 sales in May (versus 260 for May '09) and 3046 units for the year to date (as compared with 1968 last year).

"At present, we're operating in one of the most confused and distorted markets in our recent history -- indeed, since I can remember," said Senior at the Forester 2.0D launch.

"We've had the unusual situation of large numbers of cars that were sold last year, boosting the first quarter VFACTS significantly because no one had the stock on ground to fulfil those orders prompted by the investment allowance.

"Then, we've seen massive spikes in the market because of one-off instances, like the large number of vehicles written off in the West Australian and Victorian hail storms. Some put those numbers as high as 40 to 50,000 vehicles in total."

Senior also mentioned as a contributing factor in the improving sales, the increased presence of rental car fleets in the market -- up 193 per cent and adding about 7000 units to sales (up to the end of April).

The top ten manufacturers, based on year-to-date sales were: Toyota (86,213), Holden (54,821), Ford (39,184), Mazda (34,847), Hyundai (34,316), Nissan (25,772), Mitsubishi (25,169), Subaru (17,043), Honda (16,832) and Volkswagen (14,547). Only Honda's sales remain below the figure for the same period last year. However, as a positive sign for the importer, Honda's sales during May (3508) were over 300 units ahead of the figure for the same month last year.

The top ten cars for the month were: Holden Commodore (3899), Toyota Hilux (3665), Ford Falcon (3258), Mazda3 (2901), Toyota Corolla (2796), Holden Cruze (2484), Hyundai i30 (2385), Mitsubishi Lancer (2368), Nissan Navara (1972), Toyota Camry (1966). Of note are the number of small cars now present in the top ten, five in all. The balance comprises two large cars, two LCVs and one medium-segment car.

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