Australian car sales expected to struggle with grim outlook

The Australian new car market is struggling. The downturn has already claimed Holden’s scalp and coronavirus is set to make things worse. But some brands are thriving.

The Australian new car market is in a deep hole with no way out in sight.

February represented another poor month of sales — down about eight per cent compared to last year — continuing a downturn that has gone on for 23 month in a row.

Head of the Federal Chamber of Automotive Industries, Tony Weber, said the industry is going through an extraordinarily difficult time, which is highlighted by the recent departure of Holden.

Sales of the RAV4 exploded in February. Picture: Thomas Wielecki.

“In economic terms, a recession is declared after two quarters of negative growth – and this industry has now seen seven consecutive quarters of negative growth,” said Mr Weber.

The market has been battered by a horrendous bushfire season and the drought, which is crippling much of the nation.

The escalating threat of coronavirus promises more hard times ahead for carmakers.

Hyundai has already announced that it has had to idle several factories due to supply constraints from the shutdown of parts factories in China due to coronavirus. Mazda is believed to be in a similar situation with the brand unlikely to have the parts necessary to keep up production.

Mazda is expected to be hit by a slowdown in production caused by the coronavirus outbreak in China.

But there were some bright spots in February. Toyota bucked the downward trend and posted a sales increase of eight per cent.

The Toyota HiLux was again the best selling vehicle in the country with 3421 units sold.

The surprise packet was the Toyota RAV4 (3375), News Corp’s 2019 Car of the Year, which sold more than double the amount it did last February.

The rise of the RAV4 meant that the long term second placed Ford Ranger (3202) fell to third spot.

The Toyota Corolla (2520) and Hyundai i30 (2152) rounded out the top five.

Subaru was another top performer. After a tough 2019 and a slow January, the Japanese maker bounced back with a 28 per cent sales jump over February last year when supply dramas dragged it down. The Forester and XV SUVs led the way. Both models benefited from the introduction of hybrid variants at the end of the month — which according to Subaru are sold out for several months.

The HiLux was the best selling vehicle in the country, but utes sales were down dramatically.

The prestige market rebounded in February. The big three — Audi, BMW and Mercedes-Benz — posted better numbers, with BMW logging the biggest increase, of almost 10 per cent. The new 1 Series hatch and 3 Series sedan led the charge. Mercedes also managed to crack the top 10 best selling brands, sneaking into tenth ahead of Subaru.

Land Rover, Lexus and Volvo also recorded sales increases.

The BMW 3 Series is enjoying strong sales.

And it wasn’t all good news. The shine is starting to come off the darlings of the Australian new car market, utes. Sales fell off a cliff in February — a drop of more than 22 per cent. The long standing fall in sales could be a result of the recent bushfire emergency and the crippling effects of drought. Every major ute producer experienced a drop in sales though affordable Chinese brands Great Wall and LDV saw a spike in sales.

Australia’s second-favourite brand has had a rocky start to the year. Sales are down by more than a quarter in the first two months, mainly thanks to sluggish sales of its popular hatchbacks. So far this year, the Mazda3 has attracted roughly half the buyers it did for the same period last year, while the baby Mazda2 has had a horror start to the year — sales have slumped by almost 70 per cent. Increased sales of SUVs, including the new CX-30, helped offset the decline in car sales.

Mercedes-Benz has cracked the top 10 brands.

Mitsubishi sales were down by more than a third in February as demand for the Triton ute dropped off markedly. The ute typically makes up more than a quarter of the brand’s sales but it wasn’t the only poor performer — the ASX and Eclipse SUVs each recorded falls of more than a third. The bright spot was the Triton-based Pajero Sport SUV, which had a 35 per cent jump over the same month last year.

Top 10 best selling cars in February

Toyota HiLux - 3421

Toyota RAV4 - 3375

Ford Ranger - 3202

Toyota Corolla - 2520

Hyundai i30 - 2152

Mazda CX-5 - 1969

Kia Cerato - 1873

Toyota LandCruiser - 1839

Mitsubishi Triton - 1673

Toyota Camry - 1445

Top 10 best selling brands in February

Toyota - 17,679

Mazda - 7230

Hyundai - 5945

Mitsubishi - 5513

Kia - 5120

Ford - 4856

Nissan - 3804

Volkswagen - 3633

Honda - 3522

Mercedes-Benz - 2673