Hamico
05-05-2009, 08:18 PM
Looks like Holden's Korean move, may prove a smart move after all.....
Buyers flock to value brands as car sales continue to plunge
http://www.drive.com.au/Editorial/ArticleDetail.aspx?ArticleID=62639&vf=12
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Richard Blackburn, drive.com.au, May 5, 2009
Car sales dipped by almost a quarter in April, but Korean brands have bucked the trend as buyers hunt for bargains.
By RICHARD BLACKBURN.
Australian car buyers are turning to cheaper brands as the recession bites, with Korean makers Hyundai and Kia reporting increased sales in April, while the rest of the market slumped by almost a quarter.
April sales were down 23.9 per cent on the same month last year, with market leader Toyota suffering a dramatic 37 per cent drop in sales.
But Hyundai sales are up by 12 per cent in the first four months of the year, while Kia recorded a modest sales increase in April.
Hyundai, which became synonymous with cheap motoring in the 1990s, has traditionally thrived when economic confidence is down, as buyers look to trim their expenses.
The brand enjoyed a sales boom in the wake of the 1997 Asian economic crisis and in July 1998, the Excel toppled the Holden Commodore as the country’s top-selling car.
Hyundai head of sales and marketing, Kevin McCann, says there has been a definite shift away from Japanese brands to Koreans, both with private buyers and fleets.
“In economic down times people tend to drift to value and that has coincided with us bringing out new models,” he said.
“We are seeing people trade in vehicles from the leading Japanese brands. About half our trade-ins are other brands, mostly Japanese.”
Social commentator David Chalke said the migration to value-for-money brands is to be expected in a recession.
“The first thing people do in a time like this is defer buying anything they don’t have to, but if they have to make a purchase decision, they look at relative perceived value, rather than any aspirational element,” he said.
“There’s no more ‘Oh my god it has to be European or German’,” he said.
“It’s called conspicuous de-consumption; deliberately and consciously buying down scale to tell everyone you are responding to the current economic pressure,” he said.
Toyota was suffering from being caught in the middle ground, because recessions tended to polarise buyers.
“Toyota is the classic ‘middle ground’ brand. It’s neither the cheapest, nor the sportiest or most prestigious and that’s a dangerous place to be at a time like this,” he said.
Of most concern to Toyota is the performance of its locally-built sedans, the Camry and Aurion. Sales of both cars were roughly half what they were last year, placing pressure on the company’s Altona Plant in Victoria, which is one of eight plants around the globe that produce the Camry.
In contrast, the other locally-made sedans, the Holden Commodore and Ford Falcon are outperforming the rest of the market. Falcon sales were up by close to 20 per cent, while Commodore sales slipped by less than 5 per cent, allowing it to retain its crown as the best selling car in the country.
The locally-built Territory off-roader, however, continues to struggle, with sales down by more than 40 per cent in the first four months of the year.
Overall, Holden sales were down by 23 per cent and Ford’s by 17 per cent. Other brands fared much worse. Mitsubishi sales were down 37 per cent and Honda down 30 per cent, while Mazda and Nissan both dropped by 24 per cent.
The results will put increasing pressure on the Federal Government to introduce some form of retail stimulus for the car industry.
Overseas, some Governments have introduced “scrappage” schemes, which offer financial incentives to owners of old cars to scrap their car for a newer model.
A scrappage scheme has met with spectacular success in Germany and the British Government has recently followed suit.
To date, the Australian Government has focused on business sales, offering a 30 per cent tax rebate to small businesses which buy a new company car before the end of the financial year.
Car makers have been advertising the rebate on television in an effort to pull forward business purchases, but the legislation is yet to pass through Parliament. Dealers claim buyers are holding off until the rebate is confirmed, which is unlikely to happen before the middle of June, just two weeks before the scheme is due to end.
The chief executive of the Federal Chamber of Automotive Industries, Andrew McKellar said yesterday there was a case for the tax rebate period to be extended past the June deadline.
He said some form of scrappage scheme or similar retail incentive was “not without its merits”, but said the rebate had to be given time to work.
“The bottom line is that if people are concerned about their employment prospects, no matter what sort of incentive you put in place, they are not going to buy a new car,” he said.
.
Buyers flock to value brands as car sales continue to plunge
http://www.drive.com.au/Editorial/ArticleDetail.aspx?ArticleID=62639&vf=12
---------------------------------------------------------------
Richard Blackburn, drive.com.au, May 5, 2009
Car sales dipped by almost a quarter in April, but Korean brands have bucked the trend as buyers hunt for bargains.
By RICHARD BLACKBURN.
Australian car buyers are turning to cheaper brands as the recession bites, with Korean makers Hyundai and Kia reporting increased sales in April, while the rest of the market slumped by almost a quarter.
April sales were down 23.9 per cent on the same month last year, with market leader Toyota suffering a dramatic 37 per cent drop in sales.
But Hyundai sales are up by 12 per cent in the first four months of the year, while Kia recorded a modest sales increase in April.
Hyundai, which became synonymous with cheap motoring in the 1990s, has traditionally thrived when economic confidence is down, as buyers look to trim their expenses.
The brand enjoyed a sales boom in the wake of the 1997 Asian economic crisis and in July 1998, the Excel toppled the Holden Commodore as the country’s top-selling car.
Hyundai head of sales and marketing, Kevin McCann, says there has been a definite shift away from Japanese brands to Koreans, both with private buyers and fleets.
“In economic down times people tend to drift to value and that has coincided with us bringing out new models,” he said.
“We are seeing people trade in vehicles from the leading Japanese brands. About half our trade-ins are other brands, mostly Japanese.”
Social commentator David Chalke said the migration to value-for-money brands is to be expected in a recession.
“The first thing people do in a time like this is defer buying anything they don’t have to, but if they have to make a purchase decision, they look at relative perceived value, rather than any aspirational element,” he said.
“There’s no more ‘Oh my god it has to be European or German’,” he said.
“It’s called conspicuous de-consumption; deliberately and consciously buying down scale to tell everyone you are responding to the current economic pressure,” he said.
Toyota was suffering from being caught in the middle ground, because recessions tended to polarise buyers.
“Toyota is the classic ‘middle ground’ brand. It’s neither the cheapest, nor the sportiest or most prestigious and that’s a dangerous place to be at a time like this,” he said.
Of most concern to Toyota is the performance of its locally-built sedans, the Camry and Aurion. Sales of both cars were roughly half what they were last year, placing pressure on the company’s Altona Plant in Victoria, which is one of eight plants around the globe that produce the Camry.
In contrast, the other locally-made sedans, the Holden Commodore and Ford Falcon are outperforming the rest of the market. Falcon sales were up by close to 20 per cent, while Commodore sales slipped by less than 5 per cent, allowing it to retain its crown as the best selling car in the country.
The locally-built Territory off-roader, however, continues to struggle, with sales down by more than 40 per cent in the first four months of the year.
Overall, Holden sales were down by 23 per cent and Ford’s by 17 per cent. Other brands fared much worse. Mitsubishi sales were down 37 per cent and Honda down 30 per cent, while Mazda and Nissan both dropped by 24 per cent.
The results will put increasing pressure on the Federal Government to introduce some form of retail stimulus for the car industry.
Overseas, some Governments have introduced “scrappage” schemes, which offer financial incentives to owners of old cars to scrap their car for a newer model.
A scrappage scheme has met with spectacular success in Germany and the British Government has recently followed suit.
To date, the Australian Government has focused on business sales, offering a 30 per cent tax rebate to small businesses which buy a new company car before the end of the financial year.
Car makers have been advertising the rebate on television in an effort to pull forward business purchases, but the legislation is yet to pass through Parliament. Dealers claim buyers are holding off until the rebate is confirmed, which is unlikely to happen before the middle of June, just two weeks before the scheme is due to end.
The chief executive of the Federal Chamber of Automotive Industries, Andrew McKellar said yesterday there was a case for the tax rebate period to be extended past the June deadline.
He said some form of scrappage scheme or similar retail incentive was “not without its merits”, but said the rebate had to be given time to work.
“The bottom line is that if people are concerned about their employment prospects, no matter what sort of incentive you put in place, they are not going to buy a new car,” he said.
.