WILL 2017 be the year SUVs finally overtake passenger cars? There’s a chance, although it’s more likely that it will be 2018 when the high-riders finally surpass sedans, hatches and wagons on the sales charts, according to this exclusive Wheels analysis of the changing dynamic of the Australian new-car market.
The late-year arrival of key new SUVs from Holden and Hyundai – and the fact there’s plenty of kick left yet in some of the country’s top-selling small cars – means passenger cars should hang on for another year.
The fact the Aussie Holden Commodore will be in its final year of sales also provides much needed muscle to the passenger-car segment.
Instead, 2017 will be a year of consolidation for the industry, and brands such as Toyota and Hyundai will have to fight hard to maintain their high volumes. Mazda is set to continue its incremental growth, while Volkswagen should find its feet again off the back of significant new models.
Others could struggle. Mitsubishi, for example, is battling with an old model range, while Ford is having to fight a full year without locally made models that until recently made up a big chunk of sales.
Here’s the Wheels prediction for the top brands in 2017. *All 2016 sales data from VFACTS, January-November 2016
Toyota loves stretch targets – such as the one to sell one in every four cars in Australia – but 2016 was an indication of the headwind the brand faces. Sales came off slightly, mainly with the company’s two big players, Corolla and Camry. That was countered by some growth from RAV4, although Prado and Kluger eased slightly. The arrival of Fortuner late in 2015 accounted for Toyota’s modest growth, proving there’s a market for a serious offroader more affordable than Prado.
The Hilux ute was set to hold top spot in ute sales – and, possibly, overall – but mainly off the back of the tradie-focused 4x2 cheapies, a market its closest rival Ford doesn’t play in as heavily; in the 4x4 ute segment, Ford was 158 units ahead with a month to go.
Despite its dominance in SUVs – Toyota sells one-third more than its nearest competitor – Toyota’s mix is relatively low, at 31 percent of sales (well below the industry average of almost 38 percent). Blame that on increased competition but also the growth of small SUVs, a market Toyota currently doesn’t play in. That will change in February when the C-HR arrives, providing a crucial entrant in a segment now accounting for almost one in 10 sales. It’s a big play for Toyota, and one that will more than offset the demise of the FJ Cruiser. Now that the LandCruiser 70-Series singlecab ute has five-star ANCAP status, it’s back on the shopping list of big fleets, including mining companies, so it should lift.
The late-2017 end of manufacturing is Toyota’s biggest challenge and could consume valuable headspace usually devoted to selling cars.
Toyota will also have to manage the arrival of the C-HR to ensure it doesn’t simply steal sales off existing models. Another challenge is transitioning Camry buyers to the new imported model, due in 2018. Yes, it’ll be the same formula, but prices will increase because discounts are currently offered (and losses incurred) on locally made Camrys. Toyota also needs to up the style and sexiness of its cars; its reputation for reliability and quality has helped position the brand, but competitors are catching up or matching it in many cases, something that has eroded that USP.
A dominant top-seller, but with cracks appearing. Often it seems Toyota is keen to do as little as required to maintain market share rather than innovate and push to cement its lead.
210K 210K 2016 YTD results* 189,685 sales, up 2.5%, 17.6% market share
210K 210K RANKING: 1st; 210,000 sales (even), 17.5% market share
Mazda was on track for a sales record in 2016, with 120,000 cars in sight. SUVs were again strong, with the company producing two of the top three in the country.
And while the Mazda 3 won’t take the overall sales crown, it’s still one of the country’s top-selling models and has achieved that with strong natural demand (rather than from big discounting). That said, car sales came off for Mazda, with the 2, 3 and 6 together down a few thousand units.
It’s all about incremental growth for Mazda in 2017. Each of its models are very strong in their classes, so Mazda has to keep plugging away to maintain momentum. A new CX-5 arrives around April, so the changeover will be crucial for keeping the popular model at the top of the SUV sales charts. The BT-50 ute remains a big opportunity and Mazda is increasing its focus on small businesses, such as tradies, who tend to gravitate towards other brands with bigger fleet deals. Despite its ‘zoom-zoom’ image, Mazda has a lacklustre performance-car range, so there’s plenty of opportunity there, though don’t expect it to materialise in 2017.
Maintaining the current momentum and improving on what is a very strong model range that’s sold very well. As we’ve seen in the past (from Honda, Holden, Ford and others), that can change quickly, so it’s important Mazda maintains its focus on cars and customers.
Mazda has no sales duds, each car pulling strongly in its class.
Its SUV range, for example, consists of only three models (CX-3, CX-5 and CX-9) yet Mazda is the second-biggest SUV brand in the country behind Toyota (which has double the models).
The challenge for Mazda is keeping the cars fresh and enticing enough against often newer competition.
Happy customers, happy dealers and growing sales; life for Mazda Australia is rosy for now. But the brand has to keep the accelerator pinned to the firewall and avoid getting complacent.
Politics could again play a part in the car market for 2017, although this time its global rather than domestic that’s shaping up to be a game-changer. Will controversial US president Donald Trump bring on financial Armageddon, as some have predicted?
Any change to consumer confidence can make a big difference to car sales.
It was a disappointing year for Honda, which year for Honda, which saw sales drop despite the introduction of an all-new Civic sedan. Thankfully the HR-V (Honda’s top seller by far) performed well, while the ageing CR-V slid slightly. 2017 is shaping up to be more fruitful, with the new Civic sedan (including Type R) and a new CR-V (with turbo power and a seven-seat option).
120K 120K 2016 YTD results* 108,446 sales, up 4.0%, 10.0% market share
123K 123K RANKING: 2nd; 123,000 sales (up 2.5%), 10.3% market share
It was an up and down year for Hyundai, much of it driven by what deals (and models) were in the market. The death of the i20 in 2015 was always going to leave a hole and, despite trying to plug it with Accent, there was a net drop in volume. The return of the Tucson nameplate only held pace with the ix35 it replaced and, while i30 grew impressively, it was on the back of massive discounts that saw sales leap and dive throughout the year. The mega deals were all about battling through a year in which new product was minimal (the Elantra early in the year was the biggest news); market share dropped as a result, although sales volume was about even.
Hyundai desperately needs a small SUV, something set to arrive around September. That promises a kick in the second half of the year, albeit one that could come at the expense of other models, including i30, a new model of which, pictured left, is due around April. The i30 is by far Hyundai’s biggest-selling model so is crucial to any big sales play in 2017, and the new model promises big improvements to driving nous and a new Euro-designed interior that ups the game for a company that’s had some plasticky presentations on recent efforts.
Hyundai will also make its foray into the eco-friendly hybrid market with the Ioniq plug-in, which is not about big volumes but will add some incremental sales and help establish the brand as more than a maker of good-value cars.
Reducing the reliance on i30. Sales of small cars dropped almost five percent in 2016, so it’s a declining market, yet one that accounts for 42 percent of Hyundai sales (once you include the Elantra sedan).
Also, Hyundai has made it clear the new i30 will be sold more on merit than price, something that will see it fight more fairly with Golf, Corolla and Mazda 3 – which will make life a lot tougher for it.
Hyundai is also under pressure from multiple levels; Mazda and Toyota keep applying pressure from above, while sister brand Kia and keen-to-recover Holden are charging hard from below.
Big sales, but many of them as a result of big discounts. Hyundai now needs to rely less on the deals and more on the cars, something that will provide plenty of challenges over coming years.
2016 was the year of the ute, with sales jumping 10 percent. And almost all of that growth can be attributed to 4x4 versions of the top two sellers, the Toyota Hilux and Ford Ranger. Sales of 4x4 Rangers were up 6890 in the first 11 months of 2016, while the Hilux 4x4 surged 4240. Ute sales for the full 12 months in Australia will hit about 190,000.
103K 103K 2016 YTD results* 94,503 sales, down 0.4%, 8.8% market share
105K 105K RANKING: 3rd; 105,000 sales (up 2%), 8.8% market share
An underwhelming year for Holden on the sales front, down eight percent, largely due to old models (Cruze, Captiva and Barina) that lack showroom sizzle, and substance. At least Commodore continued with much-needed strength in what is still a sizeable large-car segment.
But it was a year of consolidation for Holden as it began to introduce the new breed of imports that will define the company over coming years. The impressive little Spark arrived early, but new micro cars never translate into big numbers. Similarly, a heavily revised Colorado boosted profits and reputation but only tickled sales. The recently arrived Astra heralds a return to Holden’s small-car glory days with great dynamics and drivetrains, albeit with pricing that pits it against classy segment leaders. The result will leave Holden in fourth – its worst on record.
Astra and Equinox (arriving late in the year) are the big hopes for Holden in 2017. Both are new and arrive in two of the biggest segments, offering opportunity for growth. However, Holden’s focus is also on sustainable profits, which means we’re unlikely to see prices matching the bargain cars in those respective segments.
Throw in an updated Trax (same underneath but with a redesigned snout and nicer interior) and for much of 2017 the brand will have fresh metal in segments that count.
Holden also needs momentum from the updated Colorado, which can now fight with the big boys.
Expect Commodore sales to dip (production numbers have already been set) but still be healthy.
Interest in the last Aussie muscle cars will deliver healthy V8 demand.
2017 will arguably be the toughest in Holden’s 69 years. The Elizabeth production line shuts down late in the year, consuming some brainspace of top brass, and there are still holes in the line-up, such as the large seven-seat SUV category dominated by the likes of Hyundai, Toyota and Mazda.
Holden also has plenty of work to do with young buyers, who don’t care about the brand’s history – and, subsequently, don’t buy many of its cars. Holden has to accept it’s now a challenger brand rather than the powerhouse it once was.
Holden is trying to mimic the successful ‘premium’ model of Mazda and VW, but the brand image is tarnished and will require TLC – and new-model muscle – to enjoy genuine success. That will take a lot longer than 12 months.
It was another tough year for Jeep in 2016, with sales plummeting 50 percent.
Only the Renegade posted a gain, but only because it was its first full year on sale; even then it was a dismal result courtesy of unrealistic pricing and strong competition.
The brand is hoping for a resurgence in 2017 off the back of an all-new Compass and some model tweaks.
96K 96K 2016 YTD results* 86,583 sales, down 7.7%, 8.0% market share
100K 100K RANKING: 4th; 100,000 sales (up 3%), 8.3% market share
The headline number for Ford is growth of 17 percent, at least quadruple that of its key competitors. It’s the first time in some 12 years that Ford sales have grown. That growth has come from the Ranger ute, which accounts for 45 percent of Ford sales. With the exception of Mustang, every Ford passenger car – Focus, Falcon, Fiesta – is down, as are Territory and EcoSport. Thankfully, the relatively fresh Everest is doing modest numbers and putting a positive spin on its SUV family.
Mustang was close to being Ford’s top-selling passenger car in 2016, which is an indication of how poorly others performed.
As we’ve said before, Ford’s opportunities lie with anything that isn’t a Ranger. It has an almost unhealthy reliance on the ute, which will come under increasing pressure as competition ramps up over the next few years. And while Ford’s focus has been on natural demand rather than discount deals, the hard truth is that sales of Focus are dismal and EcoSport has bombed in what is a booming small-SUV segment. So Ford has to work out a way to make those fire. An updated EcoSport and the revival of the Escape name (why was it ever shelved?) should help with SUVs, as will an expanded Everest family.
The end of local manufacturing will gouge a massive chunk out of Ford sales; up until the October shutdown of the Broadmeadows plant, Australian-made cars accounted for 19 percent – almost one in five – of Ford sales. Without a direct replacement for Territory (an expanded Everest family will partially fill the void) or Falcon (buyers could look at Mondeo), there is more downside than up for Ford in 2017. The challenge will be eking more out of existing models.
A much-needed resurgence for Ford in 2016, but off the back of only two models. Storm clouds are gathering again for a company that struggles to sell anything but Rangers and Mustangs, so expect some of those gains to be wiped out in 2017.
83K 83K 2016 YTD results* 74,741 sales, up 16.5%, 6.9% market share
79K 5th; 79,000 sales 79K RANKING: 5th; 79,000 sales (down 5%), 6.6% market share
Mitsubishi is more practised at facelifts than the busiest Hollywood plastic surgeons.
In one small way that’s a good thing, helping to stave off a sales slump on some models and allowing Mitsubishi to post growth in 2016. But it’s the Pajero Sport that is waving the sales flag for Mitsubishi, more than countering a dip across existing models other than ASX, which continues to do well courtesy of sharp pricing and a late-year facelift that added more bling to a proven formula in what is a booming SUV sub-segment.
Mitsubishi has suffered heavily from the post-GFC R&D cutbacks and some poor decisions at the Japanese head office to focus on electric cars when the world wasn’t ready for them (or, at least, not ready for weird-looking ecohatches like the i-MiEV). So the main opportunity in 2017 is more updates, more equipment, sharper deals and more marketing.
Speaking of which, expect an update on the Triton in 2017, while a full year of the expanded Pajero Sport range should yield decent results. Oh, and the Outlander PHEV gets a decent update early in the year.
Maintaining interest in a range that’s among the oldest on the market. With the exception of Triton and Pajero Sport, the Mitsubishi garage is looking old and feeling tired. A new Lancer would be good given the thoroughly underwhelming current car. But none of that is on the horizon and the best Mitsubishi has to look forward to is some fresh product from Nissan as part of the recent buyout. Until then, it’s up to the dealers to sharpen those pencils…
A respectable result in 2016 given the tools it had to work with, but Mitsubishi is fighting largely on price with an ageing model line-up, something that will create bigger challenges in the future.
73K 73K 2016 YTD results* 66,616 sales, up 3.7%, 6.2% market share
71K 71K RANKING: 6th; 71,000 sales (down 3%), 5.9% market share
Nissan (again) relied heavily on SUVs. It dropped some of its passenger cars (Pulsar hatch and Mirage) and, despite a very expensive race program, sales of the underwhelming Altima continue to fall. Qashqai and X-Trail did the heavy lifting, albeit off the back off cashback and finance deals, but the new Navara hasn’t fired as expected.
Navara is arguably Nissan’s biggest opportunity – but only if the recently arrived update is well received. Ute sales are booming and Nissan missed out (down 15 percent), so it needs to again lean heavily on a vehicle that once outsold all rivals except Hilux.
Also expect an update to Pulsar sedan, which should help kick along below-par sales. X-Trail and Pathfinder should also get 2017 updates, helping reignite interest in models that sell more on size and price than driving manners.
Maintaining sales with fewer cars. The company has to learn how to settle into natural sales demand with fewer models. In some ways the smaller line-up will help because it focuses attention better, but the reality is the current Nissan line-up is largely underwhelming. Hopefully those planned updates can solve some of those issues.
If it wasn’t for a broad range of SUVs, Nissan’s pain would be a lot more acute. Next step is lifting the substance across its range.
67k 67k 2016 YTD results* 55,413 sales, up 3.0%, 5.7% market share
64k 64k RANKING: 7th; 64,000 sales (down 4%), 5.3% market share
It was a year of rebuilding for Volkswagen after the shock of the emissions cheating scandal, which required many meetings with government departments and rolling out updates for diesel engines. Sales slumped, too – down 6.7 percent to the end of November after a similar drop in 2015 – predominantly due to its small cars, Polo and Golf. Volkswagen also spent plenty of time focusing on after-sales service, an area that desperately needed attention.
Get ready for a big year for Volkswagen in 2017. A full year of the new Tiguan should alone account for decent sales growth.
Then there’s the updated Golf (Golf 7.5), which should reignite interest in the brand’s top-seller.
And the V6 Amarok’s solid start in the sales race should build momentum throughout the year, with more variants planned to capitalise on healthy demand.
Throw in the improved customer service and Volkswagen is a brand that should be on the up.
Volkswagen’s “premium for the people” positioning means it won’t be fighting hard on price, something that potentially limits the scope of its growth. But at the same time Volkswagen can benefit from the luxury push into mainstream markets. Great driving dynamics, quality interiors, increasingly healthy equipment lists and European lineage mean Volkswagen is one of the bestpositioned to convince someone shopping a Mercedes/BMW/Audi to at least consider one of its wares.
It’s been a character-building year but Volkswagen has risen to the challenge, acknowledging some of its failings along the way.
Next step is to capitalise on some excellent new arrivals.
58K 58K 2016 YTD results* 52,006 sales, down 6.7%, 4.8% market share
63K 63K RANKING: 8th; 63,000 sales (up 8.6%), 5.3% market share
It was all about crossovers for Subaru in 2016. Between the topselling Forester and Outback, and the still-popular XV, high-riding soft-roaders accounted for almost three-quarters of Subaru sales.
There were various ups and downs, with the mild drop-off in Impreza sales towards the end of its life countered by demand for the newly arrived Levorg. Add it all up, though, and it was a memorable year for Subaru, which at the end of November was poised to post a new sales record for the brand. y ,
It’s all about the new Impreza and its crossover XV stablemate for 2017. Having arrived just before Christmas, Subaru will be looking to boost sales of its new small car, but it’s the XV that holds the most hope. The higher-riding version of the Impreza hatch with revised bumpers for more visual aggression typically outsells the Impreza by about two-to-one. The new XV – complete with active safety gear, better refinement and a classier interior – arrives mid-year, providing a second-half springboard to boost sales. The loyal Outback market should continue to flock to what is a good car, while the WRX should benefit from a refresh before it’s phased out, leading to some run-out deals.
Then there’s an updated BRZ, which will breathe some sales life into the low-volume 86 lookalike.
Fending off the competition will be Subaru’s biggest challenge.
It has some great cars, but the competition is more intense than ever, so it’s a matter of maintaining momentum on existing models and forging ahead with new arrivals. The small-car market has some excellent rivals, for example, one of which will be an updated Volkswagen Golf mid-year.
A solid result from a brand with a loyal customer base and a good reputation. But Subaru has to keep the throttle mashed to maintain momentum.
47K 47K 2016 YTD results* 43,110 sales, up 7.8%, 4.0% market share % , e
50K 50K RANKING: 9th; 50,000 sales (up 6%), 4.2% market share