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Otto Insider30 Jan 2008
NEWS

Who wants to be a millionaire?

The Australian new vehicle market hit the magic million for the first time in 2007. In a record year, only one or two players missed out, but the devil is in the detail of market share and growth percentage points

Comment

One million new vehicles sold in a single year in a population of around 21 million souls is a good news story. And an impressive indication of the robust nature of the current economy...

Look up and down your street, if not in your own backyard, and chances are there's an '07-plater snoozing in the sunshine.

Bring me sunshine
Unabated confidence in the Aussie economy prompted 1,049,982 new vehicle sales, according to VFACTS. The economic sunshine was not confined to booming business buyers either. Mums and Dads were feeling full of it too: 42,888 additional private registrations were recorded in 2007 (over 2006), though sales to private buyers rose only 9.4 per cent compared with 10.5 per cent for business buyers.

Private buyers wheeled home 498,748 new vehicles last year, while businesses handed out 381,010. Government purchases were down by 5 per cent to 74,523, but rental companies were fed more cars than in 2006 -- with 58,470 vehicles bought, an increase of almost 13 per cent. (Heavy goods vehicle sales not included.)

Foreigners are in flavour
Okay, so we're buying fewer homemade cars and utes than ever (200,485 compared with 201,623 in 2006), and some export markets might be showing signs of economic instability, but overall, carmakers and retailers have every right to be feeling good.

Except that as ever, some won't be.

In a boom market that is 9.1 per cent up overall, and 16 per cent up in the Sport Utility Market, there are, of course, those who took the bull market by the horns, and those who failed to capitalise.

Toyota is reigning supreme, and in a year when several of its major sellers were replaced by all new models (thus suffering a modicum of supply shortages, run out stock imbalances, etc),  Toyota managed to cream 22.5 per cent of the total market. Its passenger market share was an impressive 21.1 per cent and the LCV share was 32.4 per cent -- RAV4, Kluger, Prado and Land Cruiser accumulated 22.4 per cent of the SUV market segments.

The dark cloud hovering over Toyota's rivals in 2008 is how will the stats read with all major selling lines stocked to move at full throttle through 2008?

With only HiLux in the frame for significant model renewal action this year, Toyota's sales teams will have no excuses for not posting monthly record after monthly record.

The smallest sales increase possible was posted by Holden in 2007. The Red Lion added only 169 more sales (0.1 per cent growth) to its 2006 tally in our biggest market ever. The VE Commodore's first full year of sedan sales only outshone the VZ/VE run-out/ramp-up year by 776 units.

Compared with Holden's 169 added sales, Toyota notched 22,800 more vehicles in 2007 compared with 2006.

As for Ford, the Blue Corner was 6894 sales adrift of its 2006 tally, a six per cent sales drop year-on-year overall (and thus 15 per cent adrift of the market).

Would you be surprised to learn that the Three Diamonds car company added 11,222 more sales in 07 compared with 06, thus generating growth equal to half that of Toyota, and claimed third spot in terms of overall sales growth in 2008?

So who was second? No prizes for guessing Mazda. The Zoom-Zoomers had successes in every department in 2007, the new CX-7 instantly a hit with 6832 sales and the CX-9 arriving late in the term to make 2008 even more interesting.

Mazda2 debuted at the end of the third quarter and immediately zoomed up the charts, while runout 6 and aged 3's posted stellar performances.

Mazda's 14,070 sales volume growth and the '07 tally of 77,734 sales is a new high-water market for Ford's most successful brand in terms of growth.

In a year with so much growth and so many car companies posting monthly sales records, only a few went backwards in overall sales numbers.

Ford's 6894 unit reversal of fortune was bigger than all other brands put together, but Ssangyong (-83), Smart (-314), Jaguar (-191) and Chrysler (-551) would have had ugly reports to write home after the New Year's Day accounts were filed.

Share and share alike
Sales numbers are all very well, but brands like to compare performance in terms of growth percentages and market share.

Among the mainstream brands, in overall sales -- that is passenger, SUV, and LCVs combined -- the percentage of total growth varied considerably. Suzuki claimed most growth with 36.6 per cent, followed by Volkswagen on 27 per cent, Mazda on 22 per cent and Mitsubishi on 20.7 per cent. Toyota's overall growth was 10.7 per cent (total market growth was 9.1 percent, you'll recall).

Among the prestige and luxury brands Audi's 25 per cent growth outstripped all others, though the Swedes via Volvo, 21.3 per cent, and Saab, 16 per cent, showed some pluck to turn around recent fortunes.

A boom market naturally encourages Supercar sales and the 91.5 per cent growth for Lotus (a creditable 90 cars), eclipsed Aston Martin's 44.1 per cent (160 cars), and Ferrari's 43.6 per cent (145 cars) -- not forgetting Roll-Royce's 41.7 per cent increase (17 Motor Cars).

Interesting, isn't it, that Aston Martin, all-but extinct in Australia just a few years ago, outsold Ferrari, which is enjoying a boom in sales?

Smart's sales declined 40 per cent, Jaguar's by 18.9 per cent and Chrysler's by 15.3 per cent.

Effectively, anyone boasting in excess of 9.1 per cent growth was ahead of the game in 2008. Land Rover gets the award for hugging the margin most tightly, with 9.3 per cent growth, (Peugeot just the wrong side at 8.6 per cent) and Dodge was the most outstanding with 505 per cent growth -- though we all know why.

You'd have to feel sorry for Hyundai whose 3484 additional sales in 2007 was the eighth biggest numerical rise in 07, yet its percentage growth at 7.5 was below that of the market… Does that make it a winner or a loser?

Hyundai nonetheless took eighth spot on the ladder of biggest sellers with more than 50,000 units. 

Switch from academics into economics, and you'd have to hope that Hyundai's additional sales helped the bottom line. Away from corporate ego and posturing, profits are what most car company HQs really care about most.

On the horizon
Significant share market falls in January, the US interest rate cut and potential rate rises back in Australia, and a new Federal government that's yet to say or do anything meaningful economically, all suggest to Otto that a period of caution may lie ahead.

While the dip in the share market might scare prestige and luxury buyers from a $100,000 new car, Kia, Hyundai and Toyota dealers may see increased activity as home ownership stretches even further out of reach for buyers… Instead will they decide instead to rent for longer and treat themselves to a new motor?

The car industry though is loaded and ready to fire a barrage of new models into the market this year.

The market will continue to fragment with more niche models, and more new brands. Dodge, Fiat, Skoda and Cadillac could all make an impact this year, as could rumours of the first Chinese brand.

But perhaps the most crucial new model this year comes from Ford with the Orion series Falcon.

Will $1.50 a litre fuel render the Blue Oval's new marvel irrelevant, as buyers of big cars favour fuel-efficient petrol fours or diesel-powered Mondeos, Mazdas, Hondas or Volkswagens? Or will the product substance reignite our big Aussie passion for a big Aussie car designed for big Aussie conditions?

A beautiful set of fuel figures from Ford could be all it takes.

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