Nuts & Bolts
By Peter Brewer
It’s somewhat curious that in 2012 when retail sales generally declined, the Australian car industry hit an all-time record over 1.1 million vehicles sold.
But it’s also a time when the industry really pulled out all stops and shaved margins to keep stock moving. All the bigger operators with their own finance arms (think GM, Renault-Nissan, Toyota and Ford) used the low interest rate environment to subsidise their own deals and stimulate sales.
Toyota, with its deep pockets and a huge dealer network which curries favour with the mining giants, was the big winner overall. While the Mazda3, so loved by the fairer gender, was our top-seller, the Hilux and recently revitalised Corolla finished second and third.
The Hilux, built in Thailand and imported under our inequitable duty-free arrangement with that country, was the big profit-maker for Toyota. Profit margins on the Hilux - particularly those sold at full retail to ordinary punters like you and me - are so lucrative that they healthily subsidise Toyota’s less-than-profitable local-build Camry exports to the Middle East.
Without the Hilux cash generator, one suspects that Toyota’s factory in Altona, Victoria, would have shut its doors at Christmas.
For the record, combined Hilux 4X2 and 4X4 sales reached a record 198,302 in 2012. The biggest selling model, and most profitable, was the SR5 twin-cab 4X4 turbo-diesel.
The leviathan of Australia’s car industry is an impressive operation. It has sales winners in almost every category and an enviable brand reputation which healthily props up its used car values. This enormous advantage, so often ignored by industry commentators who focus on what’s latest and new rather than the inherent value of the near-new, has a huge trickle-down benefit for big-volume fleet buyers.
In boom market, the losers for 2012 were largely Holden, Proton, Peugeot, and Saab (now gone completely).
Holden was hit badly by a 16.5 decline in its ute sales, and a 24.8 per cent fall for the Commodore. The new VF Commodore is coming this year, and you’ll witness a fullblown promotional push behind it to regather sales momentum. Holden also has its small SUV, the Trax, arriving in the next six months and this is a great product which will lob into one of the fastest-growing areas of the market.
For Ford, it’s Bear Grylls territory. Its three locally built cars all declined and the Broadmeadows operation is now in survive-or-perish mode. The popular turbo-diesel engine option for the Territory, imported from the UK, is costly. The four cylinder turbo Ecoboost Falcon is slowly winning favour from fleet buyers but the sales slide appears too steep.
So what are the coming brands; the ones to watch?
The Koreans are surging, Kia more so lately than Hyundai, and the Chinese - Great Wall, Chery and Foton - are gathering ominous pace.
The odds are stacked heavily against market growth this year so every brand must consolidate and endeavour not to lose volume.
That means that for the customers, the value and the deals on offer will be as sharp as last year, and next-to-nothing, lock-you-in-longterm (okay, if that suits) interest deals will be waved around again very soon.
The trick, as always, is to be prepared to walk away and put the pressure back on the retailer. It’s a buyer’s market.
One of the models to watch in the months ahead is the re-emergence of the Nissan Pulsar, yet to be launched but already being touted and pre-promoted through every available means (including Facebook).
It’s an interesting story: a well-known nameplate, well-loved by many and with hundreds of thousands of second-hand models (of various vintages, because the Japanese-built N13 was near bullet-proof) still doing sterling service.
Conquering sales from other brands, in a very tough, low-margin part of the market, is very costly so Nissan ideally needs to turn those owners of used Pulsars into new car customers. What we’ll see soon is lots of marketing leverage on the Pulsar’s reputation of yesteryear and gosh, how nice it would be to own a new one.
But there’s a few glitches in the plan. First Pulsar out of the blocks is a very conservatively styled 96kW 1.8 litre sedan (in a market segment which overwhelmingly favours hatchbacks) with a Continuously Variable Transmission (CVT) automatic as standard. It’s got plenty of kit as standard - Bluetooth, alloys and airbags everywhere - but Australians have never completely warmed to CVT autos.
Nissan is hoping that the first six months of the Pulsar - known as the Sentra in other markets - being the new kid on the block will maintain momentum until the hatchbacks - with potentially more volume on offer - are ready. But if the ploy flops, the car’s reputation may never recover.
It’s a gambit because the rivals in this market - and they are the toughest of all, including the top-selling Mazda3 and Toyota Corolla - won’t be sitting by, allowing a newcomer to waltz in and steal their sales.
The event broke vertebrae in his back, and resulting complications gave him a heart attack (requiring heart bypass surgery) but one of the genuine nice guys of Australian motorsport, Bruce Garland, isn’t ready to let the Dakar beat him.
The world’s toughest off-road race began a week ago. It’s 15 days of torture, racing in extremes of temperature (from alpine snow to 45 degrees in the desert) across South America (the original northern African route being dumped because of political instability and the untenable risk to the lives of the competitors) across terrain which sets out to break people and vehicles.
Garland and his long-term navigator Harry Suzuki have returned in a new turbo-diesel Isuzu racing ute after finding they just couldn’t keep away.
“We’ve got unfinished business in this event. I want to put an Aussie team into the top 10,” he said.
“This event pushes you ways outside your comfort zone; to just get to the end is an accomplishment in itself.
“I should have been dead, but thanks to some very gifted and dedicated medical specialists, I’ve been given a fresh shot at this and I’m going to take it.”
A friendly, engaging chap who is very quick on surfaces which would have most drivers backing off, Garland has a support crew of five mechanics, one of whom is riding in one of the racing trucks.
The Dakar field encompasses motorcycles, quad bikes, cars (including prototypes and very quick, lightweight buggies) and trucks. BMW has entered a works Mini team and at last check of the leaderboard, former winner Stephane Peterhansel appears to be the man to beat. Former Indycar driver Robbie Gordon is, as ever, charging hard in his Hummer.
Garland and Suzuki are among 14 Aussies in the 8000km event, including a bunch of bike riders who, like the quad riders, will be physically hammered from start to finish. This year’s event has already claimed its first fatality, with one rider tragically killed after a head-on crash with a police car (inexplicably driving the wrong way against oncoming competitors).
Unseasonal flash flooding in the past few days has caused the shortening and cancellation of some stages.
SBS has terrific regular coverage (plus some online downloads) and it’s well worth looking in as the event heads towards its finale in Santiago on January 20.
To find out more about Peter Brewer click here.