As we shift gear into 2016, it’s time to review 2015 vehicle sales and the impact of ongoing changes in the Australian car industry. Through our review of the VFACTS annual vehicle sales data we summarise key trends in the automotive industry, highlight the winners and losers and comment on possible future developments.
In 2015, the Australian market experienced relatively strong growth, with year-on-year car sales increasing by 3.8% (reversing the previous year’s 2% decline). Despite ongoing concerns around Australian business confidence in the context of the global economic slowdown, commercial fleet sales also experienced strong growth, recording a 4.9% increase year-on-year.
The buoyant SUV category, with a 15.9% sales increase, continues to drive the growth in automotive sales, with SUVs now accounting for 35.4% of all new car sales in Australia. Toyota (59,412) and Mazda (41,176) continue to outperform competitors with combined sales of over 100,000 SUVs in 2015, a 23% increase from 2014.
With the local motor vehicle production industry in decline, sales of Australian made cars fell by 3%. We expect this trend to continue in the lead up to the closure of the final on-shore production plant in 2017, with manufacturing predominantly shifting to Asian markets. Japan (29%) and Thailand (22%) remain the two largest individual sources of vehicles for the Australian market, making up more than half of vehicles sold.
Within Australia, the highest number of new vehicles sold was in New South Wales, closely followed by Victoria. Sales across the eastern seaboard increased, while Western Australia, Northern Territory and South Australia witnessed a decline in 2015, reflecting the general downturn in commercial and consumer confidence in these states.
While passenger vehicles sales volumes have declined year-on-year, they continue to be the category leader, accounting for 44.6% of all new car sales in Australia. Despite the slowdown in the mining and resources industry, sales of heavy commercial vehicles increased by 2.7% in 2015, possibly driven by continued strength in the residential construction and road freight industries.
Looking at overall car sales, Toyota dominates with a 17.8% market share (an increase of 1.3%) with Mazda (9.9%) now clearly in second place. Holden (8.9%) continues to lose share, currently battling it out with Hyundai (8.8%) for the third and fourth positions. We would expect Holden’s downward trend to continue, with Hyundai moving up clear 3rd place as local manufacturing ceases.
Honda experienced a 21.5% growth in 2015, driven by substantial increase in sales of their HRV & CRV models. Despite the emissions scandal, Volkswagen passenger vehicles (including the Golf & Polo) have experienced a substantial growth in sales, making it the fifth best-selling marque in this segment. The jury is still out however on whether Volkswagen has successfully navigated the emissions scandal (which broke late last year), as the follow through impact on sales may not be felt till later this year. It is worth noting though that there has been a 23.9% reduction in sales of private passenger diesel vehicles.
At a model level, there has been little change in the top 5 best-sellers since 2014. Toyota continues to dominate both the small and large passenger vehicle market, with the Camry replacing the HiLux in fifth spot overall. Within SUVs, the Hyundai ix35 is the market leader in the small-sized segment, however this model has been replaced for the 2016 model year by the new mid-sized Tucson. Designed by Audi’s Peter Schreyer, and incorporating a range of improvements such as the option of Apple CarPlay or Android Auto infotainment systems, it could give the market leading Mazda CX-5 a run for its money.
Stepping back, 2015 was a year of relatively strong growth for the car industry, with SUV sales continuing to grow despite expectations that demand would shift to smaller, more fuel efficient vehicles. In contrast, we expect 2016 to be a transformational year for the Australian automotive industry, with changes expected to the luxury car tax legislation and the relaxation of import restrictions on second-hand cars. These proposed changes, as well as the increasing inclusion of telematics and semi-autonomous driving features (e.g. Auto parking, lane assist) will give consumers even greater choice and bargaining power, highlighting the importance of customer relationships and experiences to underpin brand loyalty.
As the industry evolves to meet the challenges presented by these changes, ACA will continue to conduct research that will uncover emerging trends and provide valuable, actionable insights. To make sure you are the first to receive any new published research reports, please subscribe to our automotive blog by clicking here.
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