Australia Autos Report Q2 2008

Australia achieved the record vehicle sales that were anticipated throughout 2007, as the final tally surpassed 1mn units for the first time in the market's history to reach 1,049,982 units, up 9.1% year-onyear y-o-y. In terms of vehicle segments, data for 2007 showed growth across the spectrum of segments.

The SUV and 4x4 pick-up truck segments grew by 16% and 22.3% respectively, while at the smaller end of the scale, the small and light car segments were equally buoyant with growth of 5.9% and 10.2% respectively. Moreover, BMI's recently published Australia Automotives Report suggests that latest sales data for Q108 shows that the ongoing battle for the accolade of Australia's best-selling model reveals much more about market trends.

The Holden Commodore lost its position as Australia's best-selling car model for a full quarter in Q108, marking the first time in a decade that this has happened. Although pipped by Toyota's imported Corolla in seven separate months over the past three years, this is the first sustained challenge to the locallyproduced large car. The Corolla's rise is symptomatic of the import market as a whole, which grew by 7.9% y-o-y in Q108, while sales of domestically-produced models, such as the Commodore, fell by 15.6%. Indeed, the threat to local production in the forms of lower import tariffs and a strong Australian dollar have led to Mitsubishi closing its Adelaide plant and Toyota re-considering the future of its local facilities.

Despite being one of the more developed nations in BMI's new Business Environment Ratings for the Asian automotive industry, Australia ranks second to China with 65.5 from a possible 100. The developed nature of the country means that Australia is at a disadvantage due to its near-saturated autos market, which reduces growth potential. On the other hand, high levels of GDP increase purchasing power, while market risks are reduced by low levels of corruption and a strong legal framework.

Indeed, those manufacturers investing in Australian facilities continue to be rewarded. Boasting the country's second-best selling model in 2007 helped Toyota to claim leadership of the overall market, beating GM subsidiary Holden into second. The trend continued into Q108 as leadership of the compact and medium SUV segments, as well as the light car segment, which grew by 2.5% y-o-y, secured market leadership for Toyota. The company sold 60,224 units for a market share of 22.9%. Holden took second with a 14.8% share and Ford third with 10%, suggesting that there is still some advantage to producing locally.