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July 28, 2016 by Andrew Hill

JATO Market Focus: Australia

Australia is the world’s sixth-largest country by total area. Since federation in 1901, Australia has maintained a stable liberal democratic political system that functions as a federal parliamentary democracy and constitutional monarchy comprising six states and several territories. The population of 24 million is highly urbanised and heavily concentrated in the eastern states and on the coast. Australia is a developed country and one of the wealthiest in the world, with the world’s 12th-largest economy and the world’s fifth-highest per capita income.  Australia’s military expenditure is the world’s 13th-largest. With the second-highest human development index globally, Australia ranks highly in many international comparisons of national performance, such as quality of life, health, education, economic freedom, and the protection of civil liberties and political rights.

A substantial car industry was created in Australia in the 20th century through the opening of Australian plants by international manufacturers. The first major car maker was the Ford Motor Company of Australia and the first Australian-designed mass production car was manufactured by Holden in 1948. Australian manufacture of cars rose to a maximum of almost half a million in the 1970s (10th place in the World) and still exceeded 400,000 in 2004. Australia was best known for the design and production of ‘large’ sized passenger vehicles. By 2009 total production had fallen to around 175,000 and the Australian market was dominated by cars imported from Asia and Europe. As of 2015 Australian-designed cars are made by General Motors subsidiary Holden, and Ford Australia, while Toyota Australia manufactures local variants of its international models, particularly the Camry, but the Ford Australia engine and vehicle plants will close in October 2016 and the Holden and Toyota Australia factories during 2017. Ford of Australia’s design and development facilities remain in operation and are expanding, leaving Australia as one of only a few countries with the capabilities to design and develop mass market cars from scratch.

As the Australian market transitions to an almost exclusively import only market it remains a market of 1.2m vehicles sold a year with relative consistency. The Australian automotive market is currently made up of 49 Brands offering 311 different Models for Passenger Vehicles and has 22 Brands with 36 Models for Light Commercials. When you add the 22 Heavy Commercial Brands offering various models, this equates to over 2,300 variants for Passenger Vehicles and Light Commercials alone, making Australia arguably one of the most competitive, mature automotive markets in the world.

As with other markets, Australia is a growing SUV market with SUV sales accounting for 30% of the total market in 2014, up to 33% in 2015 and has grown to 35% for Quarter 1 2016.  Passenger cars have dropped from 49% in 2014 to 47% in 2015 and now sit at 44% for Quarter 1 2016. Australia is also a large Utility market with Utes consistently accounting for 11% of sales.  Three of the Top 10 models sold in 2015 were Utes: Toyota Hilux (3rd); Ford Ranger (5th); Mitsubishi Triton (7th). Toyota also had two other models featuring in the Top 10 for 2015, Corolla (1st) and Camry (6th).  Other Models making up Top 10 were Mazda 3(2nd), Hyundai i30 (4th), Mazda CX5 (8th), Volkswagen Golf (9th) and Holden Commodore (10th).

The Top Brands in Australia for 2015 were Toyota with clear dominance of 18% market share followed by nearest competitors Mazda 10%, Hyundai 9%, Holden 9% and rounding out Top 5 was Mitsubishi with 6%, these Top 5 Brands accounted for 51% of the total market.

Premium brands showed good 2015 over 2014 growth, with Porsche up 45%, Lexus up 24%, Audi up 20%, Mercedes-Benz up 17% and BMW up 10%.  This has been reflected in the volumes weighted average price increasing from AUD 38,469 in 2014 to AUD 40,521 for Quarter 1 2016. Alternatively, local manufactured brands such as Ford and Holden are down 24% and 4% respectively. This is mainly due to the markets shift away from large sedans which Ford Falcon and Holden Commodore dominated. Falcon had peak sales in 1995 of 64,935 vehicles and Commodore achieved its peak of 87,285 sales in 1998, both have seen progressive losses to only record 4,906 (Falcon) and 21,887 (Commodore) sales for 2015.

With regards to fuel systems for Passenger vehicles, Australia remains predominantly an unleaded petrol market. Diesel fuelled vehicles have consistently captured between 17 – 19% market share over the last 5 years, while Electric/hybrid vehicles peaked at 2% in 2012 and have remained at only 1% market share ever since.

If you have any further queries with regards to this article or would like more information on JATO services locally in the market, please contact Mark Hutchison, Regional Sales Manager for Australia at mark.hutchison@jato.com

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