motor industry fears of a major fall in demand for new vehicles during October
proved groundless as the market remained buoyant, writes Mike Duffy.

Sales of cars and commercials were down only 1,262 units (1.9 percent) compared with October 2000.

Experts cite a traditional softening during the parliamentary election campaign (polls open on Saturday) rather than the war in Afghanistan.

But while official figures, released by the Federal Chamber of Automotive Industries (FCAI), showed the car industry healthy in a time of international anxiety, there was still reason for concern – a yawning gap between leading General Motors affiliate Holden and its rivals.

Holden scored its 10th consecutive month of leadership, securing 21.6 percent of the total market. The Commodore maker and importer of re-badged European-built Opels has opened up a record lead of 48,935 vehicles over its long-standing foe Ford Australia year-to-date.

Holden is also 22,214 cars and commercials ahead of second-placed Toyota.

The establishment of the widest gap on record between a market leader and its rivals is, incredibly, cause for widespread concern Down Under.

While Holden may appear to have cause to celebrate, Ford’s predicament is far from healthy for the Australian industry.

Demand for the blue oval’s big car, the Falcon, has fallen to such a low level that production has been halted at factories in the Melbourne suburb of Broadmeadows (vehicle assembly) and Geelong town (engine production) in Victoria state.

Both will remain closed for the remainder of the week with employees on half pay unless they take holidays or programmed days off.

Middle East exports include Commodore badged as Chevrolet Lumina

Ford’s president and chief executive Geoff Polites is in Detroit presenting
a future business case. Polites has already indicated that the company will
book another loss this year – larger than in 2000.

Ford’s predicament and the lopsided market are causing components sector concern.

While Holden is growing market share, it is not taking all of Ford’s lost sales – and neither are Toyota or Mitsubishi Motors.

Importers are instead making ‘conquest sales’ and OE parts manufacturers, facing lost economies of scale and associated rising costs, see an uncertain future.

Hiked parts prices would make locally-built cars less competitive against imports – further boosting their downward spiral.

One major component manufacturer said: “If we lose economies of scale due to Ford’s falling sales, the whole industry could end up paying more for parts.

“That being the case, everyone would end up losers – including Holden.”

Holden’s Commodore, Australia’s most popular car, was 27,495 units ahead of the Ford Falcon from January 1 to October 31. In October alone, 7,476 Commodores left showrooms compared to only 4,458 Falcons.

It was Holden’s best October in 28 years with 14,886 registrations for 22.4 percent of the total market.

Toyota managed 12,373 registrations to claim 18.6 percent market share during the month but Ford sales slumped to 8,874 units for a meagre 13.4 percent.

Mitsubishi Motors claimed fourth place with 6,106 sales for 9.2 percent. Its Magna/Verada again outsold the Toyota Camry by 150 in October.

A 4,062-unit (8.2 per cent) drop in the passenger car segment was countered by significant gains by light and heavy trucks.

A total of 66,380 sales took the January to October total vehicle tally to 632,888 units.

Holden has accounted for 136,516 sales or 21.6 per cent of the market, Toyota is second (114,302, 18.1 percent), Ford third (87,581, 13.8 percent) and Mitsubishi fourth (56,790, 9 percent).

The FCAI is still forecasting a 780,000-units full year.

To view related research reports, please follow the links below:-

Light vehicle niche markets 2000

The world’s car manufacturers: A financial and operating review (download)