april 29, 2016 te ine e o otone martin roller’s lesson in...

PremiumGoAutoNewsEDITION 4 APRIL 29, 2016 THE BUSINESS PAGES OF GOAUTONEWS

Mercedes to get five-storey store in BrisbaneWorld’s biggest Mercedes and Porsche dealer invests in Breakfast Creek waterfront landmark

Tesla to open store in Martin PlaceApple shop-front strategy to put Tesla dealerships at high-profile city addresses

Kia service plan is a world firstWorkshop efficiency trials start in Sydney and Melbourne before national and global roll-out

Dealer urges car retailers to use the election to fight against the

parallel import proposal

Martin Roller’s lesson in dealer politics 101

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NEXT PAGEPREV. PAGECONTENTSSUBSCRIBEWWW.PREMIUM.GOAUTO.COM.AUThe business pages of GoAutoNews 2

AIR-CONDITIONING WARS SPARK NEW GAS RULES

Europe dumps one gas, finds another while Mercedes goes green with

its own solution


Dealer urges car retailers to use the election to fight against the parallel

import proposal

Page 3

PASSENGER SLIDES AS MEDIUM SUVS SHINE

Year-on-year contrast shows where the market is headed in 2016

DOUBLE, DOUBLE, GROWTH NO TROUBLE

Strictly managed volume of about 10 per cent share of its segments retains

Porsche margins and customer loyalty

Mercedes to get five-storey store in Brisbane

World’s biggest Mercedes and Porsche dealer invests in Breakfast Creek waterfront landmark

Page 6

TESLA TO OPEN STORE IN MARTIN PLACE

Apple shop-front strategy to put Tesla dealerships at high-profile city addresses

KIA SERVICE PLAN IS A WORLD FIRSTWorkshop efficiency trials start in

Sydney and Melbourne before national and global roll-out

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PUBLISHER: John Mellor

EDITOR: Neil Dowling

JOURNALISTS: Tim Nicholson, Daniel Gardner, Ron Hammerton, Ian Porter, Terry Martin, Byron Mathioudakis, Tung Nguyen

PRODUCTION: Luc Britten, William Vicente

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By NEIL DOWLING with JOHN MELLOR

n MEMBERS of Parliament have been put on notice by one of Australia’s biggest employment sectors that they could lose their seats if they continue to pursue the parallel car import policy.

Car dealers and the automotive industry are being urged to band together to let their MPs know, in the lead-up to the a federal election, that Australian jobs will suffer

if the proposed motor vehicle importation policy goes ahead.

With support for the Coalition on a knife-edge, a groundswell of concern about car retailing jobs could sweep through the 68,000 people who work in car dealerships located in every electorate of the country and a backlash could drive the Turnbull government from power.

Those working in the car

retail sector will be mindful of the ease with which the Coalition disposed of the Australian car manufacturing industry and fear that parallel

imports are part of a wider plan to open up Australia to used-car imports on a massive scale.

But dealers are being

reminded of their massive electoral power because of the unique position dealership businesses have in communities throughout

Australia.Dealers are

being urged to contact their local members to

explain the big picture to MPs who are mostly ignorant of the level of employment, tax raising and overall economic contribution of dealerships to

the economy and point out that dealers have $17 billion invested by families and local companies in their facilities around the country.

Dealers are alarmed that just as the Coalition passed car making over to car factories on the other side of the world, parallel imports would support car dealerships in London and Tokyo rather than dealerships in Australia.

Continued next page

Dealer urges car retailers to use the election to fight against the parallel import proposal

“If the government wants to make prestige cars more accessible, why not just eliminate

the luxury car tax?”


COMMENT





Continued from previous pageBrisbane BMW managing

director Martin Roller told GoAutoNews Premium that employees in the retail automotive industry needed to be told by dealers that the policy will affect jobs and that they may be affected.

He disputed claims that the proposed policy – that would allow private importation of new cars – could generate an additional 30,000 cars on Australian roads, as announced by minister for major projects Paul Fletcher in February this year.

He said Mr Fletcher’s estimate of an additional 30,000 car sales was difficult to believe given less than 30,000 cars in the $100,000-plus segment were sold in 2015.

“This will not grow the market in Australia and will not give car buyers more choice, but will just replace sales made by traditional authorised car dealers like ourselves,” he said.

“If the government wants to make prestige cars more accessible, why not just eliminate the luxury car tax?

(LCT)” he said.“That would be a lot simpler

and be just as effective in growing the prestige-car market.”

Mr Roller, who is also a director of Brisbane BMW, Brisbane Ferrari and Westside BMW, said his businesses employ more than 250 people and have an annual turnover of about $250 million.

He said that in 2015, these three businesses alone collected $47.7 million for the federal government in GST, LCT, fringe benefits tax FBT, company tax and withholding

tax. They collected an additional $8.6 million for the state government in stamp duty, registration, payroll tax and land tax.

Mr Roller said the proposed policy would damage car retailing in Australia and will directly affect business profits and in turn, affect employment.

“I have 250-280 staff. If this hurts my business, let government help explain it to me so I can explain it to any of my staff that I may have to let go,” he said.

“These people who may have their jobs affected are

those in the electorate. It’s the government representatives who are putting people out of work.

“There’s no good reason for this policy and there’s not even any modelling available that shows how it works and how the 30,000 additional cars will help Australia.

“Even my MP (federal minister for Brisbane, Teresa Gambaro) hasn’t seen any modelling.

“It’s high time every dealer jumped up and saw their local MP about this.”

Continued next page





Continued from previous pageMr Roller said in a three-

page letter to Ms Gambaro that any perceived benefits of Mr Fletcher’s proposed policy would be outweighed by a host of risks and exposures to motorists.

He said the policy would not reduce red tape – “in fact we think it would do the opposite”.

“As Mr Fletcher’s announcement is currently structured, these measures will largely impact the ‘top end of town’ for people wanting to buy a vehicle priced at $100,000 or more and not the bulk of Australian motorists that buy vehicles at price levels well below that,” Mr Roller said in his letter to Ms Gambaro.

“If the government are so focused on lowering car prices and increasing choice then there are a myriad of government-controlled measures that could be looked at that would not only reduce prices but increase the amount of car sales, hence increasing the overall tax revenue system in Australia.”

Mr Roller said that the Federal Chamber of Automotive Industries (FCAI) and BMW Australia “have done a good job” in fighting

the policy.“Other representations have

been made to other MPs,” he said.

“We don’t have much time, with an election imminent, to get our view across to the MPs.

“Everyone involved in our industry must inform their MP that if this policy is adopted, it will change the way they will vote.”

Mr Roller said that unless the industry shows it is against the proposed policy, it may be quickly – and quietly – passed through the parliament.

“This won’t get discussed thoroughly at the high levels of government because there are other issues – such as tax, superannuation, negative gearing and so on – that is getting top billing at the moment,” he said.

“But there’s a lot of losers if it goes ahead. There may be a handful of buyers happy but those who could lose their jobs won’t be.

“To all government MPs, we strongly urge you to shelve this nonsensical policy proposal and to place your focus and agenda onto more important policies that will stimulate the economy and create jobs.”

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World’s biggest Mercedes and Porsche dealer invests in Breakfast Creek waterfront landmark

Mercedes to get five-storey store in Brisbane

By NEIL DOWLINGn THE world’s biggest Mercedes-Benz and Porsche retailer is building a five-storey autohaus-style Mercedes showroom at the Breakfast Creek wharf site in the Brisbane suburb of

Newstead.It will be built by Chinese

conglomerate Lei Shing Hong (LSH) who last year bought two Mercedes-Benz dealerships from Daimler AG’s Australian arm, Mercedes-Benz Australia/

Pacific (MBAP).LSH now owns 180

Mercedes-Benz prestige-car outlets in Australia, Germany and South-East Asia. It is also the distributor of Porsche in Korea, Vietnam and Cambodia and a major

South-East Asian Caterpillar distributor and dealer.

The proposed Newstead dealership – which has been approved by MBAP – is at the entrance to the Brisbane CBD on a major transport route from the airport.

When completed next year, it will house showrooms, a 539 square metre automotive museum, staff training centre, shops and cafes, rooftop restaurant, dining and function area, and a garden pavilion.

Continued next page





Continued from previous pageMBAP senior manager of

public relations, product and corporate communications David McCarthy said the Newstead development will be a prominent dealership “with some very special touches”.

“It follows the autohaus style that is our corporate design,” he said. “The majority of our dealerships have such CI design features, however this will be a landmark dealership.”

Cottee Parker – the architecture firm tasked with drafting the new building – regards the design as “contemporary” with “modernist architectural design elements” while following the Mercedes-Benz autohaus theme.

“We have created a striking landmark development which is prominent and highly visible,” said Cottee Parker director Kim Voyacek.

“The highly transparent facades provide a strong visual connection between the autohaus and the surrounding precinct along the Breakfast Creek boardwalk and the adjacent street network.

“The aim is for this facility to become a catalyst and a benchmark for the future urban renewal of the precinct.”

The development is also a revival for the precinct that once boasted riverfront restaurants.

LSH also has a Mercedes-Benz dealership in Alexandria, Sydney and a van and Pre-owned Plus service site in Windsor, Brisbane.

LSH made its foray into Australian property in February 2015, buying an office building in Adelaide Street, Brisbane for $45 million.

It followed up with a purchase of a 7000 square metre property and showroom on Wickham Street in

Fortitude Valley for about $40 million in June 2015.

The purchase of the Breakfast Creek land this year cost LSH $26 million.

Daimler AG, which owns 160 dealerships in Germany, started its sell-off in June 2015. LSH has bought 15 of those dealerships located in cities in the east of Germany.

Daimler is believed to be looking at selling 50 of its 160 global outlets.





JOHN MELLOR has a wide-ranging discussion with Porsche Cars Australia chief, Sam Curtis over a cup of tea in the newly refurbished Porsche Centre Melbourne.

n THE new super-sized showroom, part of Porsche Cars Australia’s head office in Victoria Parade, Collingwood, is bustling.

The showroom of the Porsche Centre Melbourne now has 23 cars on display and many of them are lined up as if on a starting grid waiting for Glen Dix to leap out with a starters’ flag and

wave them on their way.It is an impressive sight.

So are the pricetags. At six figures, many prices have a two or a three in front of them. A four even.

With prices in such a rarified atmosphere you would expect the place to be somewhat subdued.

But no. There are buyers in evidence at various sales desks

and others are inspecting cars. The coffee shop is about half full including some children with their mother.

Out on the floor, a father and (probably) his adult son are talking around a Carrera. A nuggety weathered gentleman who might be a concreter or market gardener is looking at a Cayenne and a salesman is talking to a couple in

Mandarin about a Macan.I am waiting for an

appointment with the boss; Sam Curtis who is CEO and managing director of Porsche Cars Australia. A concierge has helped me park my car and taken me to reception where a very efficient young lady is fielding enquiries on the phone.

Continued next page

Strictly managed volume of about 10 per cent share of its segments retains Porsche margins and customer loyalty

INDUSTRY INTERVIEWS

Double, double, growth no trouble





Continued from previous pageAs I wait, wandering the

showroom, half a dozen friendly people have asked how they can be of service. Maybe one day.

This is the newly-minted Porsche where the company has made the leap from being a prestige sportscar- maker selling 1000 cars a year in this country to a seller of prestige sportscars on steroids aimed at a completely new group of buyers.

Last year the company sold 4000 units in Australia, four times its traditional activity.

In the motoring world, the kind of sales improvement achieved by Porsche in the past four years would generally only be the result of ambitious factory production schedules and ruthless stocking programs at the

expense of margins and the treatment of customers.

But Sam Curtis says with pride that the company has managed the huge jump in volume without ruffling the feathers of the traditional sportscar buyers and has welcomed many completely new buyers to the brand and smoothly absorbed them into Porsche’s family of customer programs.

The secret seems to be that rather than trying to dominate the global prestige car market with reckless volume drives, as some premium brands are doing, Porsche Cars Australia (and Porsche AG) believes the right balance in terms of volume, profit and customer relationships is to hold sales at around 10 per cent of the segments in which they compete and reap their growth.

Thanks to our customers we are the global leaders with nearly 7 million vehicles sold around the globe every year.

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nHow Porsche dealers bought into the Strategy 2018 plan

nHow Porsche Centre Melbourne will sell as many Porsches this year as the company sold nationally six years ago

nHow SUVs are underwriting advances in Porsche sportscar technology

nHow the demographic for Macan was a surprise

nHow PCA lives by the 10 per cent share rule

nHow PCA will pause to catch its breath

nHow PCA maintains a fine balance between volume and excess

nHow customer programs are meeting increased demand

nHow customer recognition lives within the Porsche DNA

^ CLICK HERE TO CONTINUE

Porsche Centre Melbourne - upgrade details

• Cost $14 million (extra cost to remove grain silos which freed up 800 square metres) • Office area increased by 50 per cent• Showroom increased from 1154 square metres to 2019 square metres• Showroom from 14 cars to 23 cars plus two delivery areas• Extra level of parking. Customer car park 120 spaces• Workshop area increased by 60 per cent• Hoists increased from 23 to 33• Repair orders to increase from 18 a day to 40 a day• Used car sales projected to increase from about 200 a year to between 300 to 400 a year.

Carsales appoints dealer

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PORSCHE CARS AUSTRALIA SHARE OF PORSCHE SALESPCA SALES AND FORECASTNew and demo

PORSCHE CARS AUSTRALIA

STRATEGY 2018Six-year plan 2012 - 2018

BY THE NUMBERS

GLOBAL

AUSTRALIA55%

17%

GLOBAL SALES AT START OF PLAN (2012)

GLOBAL SALES TARGET FOR 2018

95,000

200,000

GLOBAL SALES 2015 204,000

1373 $14units

million

million

Approx

Approx

units4090 $26

SALES 2012 PARTS SALES 2012

PARTS SALES 2015SALES 2015

16% 15%

Porsche AG net profit on sales 2015 Porsche AG net profit on sales 2016(target)

REFLECTS RECENT INVESTMENTS

*

*

SALES GROWTH IN 2015

(National, Porsche Centre Melbourne & Porsche Centre Sydney South) 37%PCA vs independent dealers

23%Melbourne share of PCA

14%South Sydney share of PCA

SUVshare of Porsche sales

Macan share of SUV sales

Macan customers new to Porsche

PCMPCA PCSS2013201420152016

1,095

4,0902,812

Approx 4,100

Approx 451

Approx 451Approx 626

Approx 626

Approx 261

Approx 261Approx 416

Approx 416

DEMOGRAPHICS

DEALERSHIPS

75% 70%60-65%

Share Porsche seeks in each segment in which it competes 10%

$45,000,000Total investment dealership upgrades

$20,000,000Investment in factory stores

$13,000,000Investment Porsche Centre Melbourne

$7,000,000Investment Porsche Centre Sydney South

$25,000,000Investment by independent dealers

Incremental sales from Doncaster store: About 90 per cent(owned by Preston Motors)

Porsche Cars Australia statistics fell out of our Premium conversation with PCA chief Sam Curtis.

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Workshop efficiency trials start in Sydney and Melbourne before national and global roll-out

Kia service plan is a world first

By Neil Dowlingn AUSTRALIA is the global pilot to a customer-focused workshop initiative aimed at boosting service efficiency, cutting costs and providing transparency to the service process.

The process, called Customer Value Innovation System (CVIS), has been

introduced initially by Kia Motors Australia at its dealerships in Parramatta in Sydney’s west and Dandenong in Melbourne’s south-east.

The CVIS program has been devised to move Kia another step towards the company’s “fix-it-right-first-time” goal. One of the program’s key

performance indicators will be reducing the customers’ waiting times.

Following the development and initial operational testing of the system, it will be rolled out to further Australian dealerships and overseas markets.

Kia’s general manager of aftersales, Phil Murray, said

“it’s the best service program I’ve ever seen”.

“We’re taking the mystery out of the service process,” he said. “We have had very good early response. When the dealers get involved in it, they will be very happy.

“Already we have some multi-franchise Kia dealers who are so positive about it

that they want to expand it to incorporate it into the service process of other brands.”

Kia told GoAutoNews Premium that CVIS will increase the dealership’s workshop productivity and profitability and become a vital tool in retaining customers.

Continued next page





Continued from previous page“Customers can find the

process of getting their cars serviced quite daunting,” Mr Murray said.

“We’re offering transparency and clarity to the customer. CVIS is a lot more effective than any program used before because it keeps the customer involved.”

Mr Murray said only a few dealers were offering the app to customers at this stage but that more were being added.

The app allows the customer to select the dealership that suits them best, make a service appointment – using a smartphone or tablet – and follow the progress of the car’s service or repair. Support includes cost estimates and photographs.

“Normally this interaction

between the customer and dealer is done by the DMS (dealer management system),” Mr Murray said.

“Now the DMS runs parallel to CVIS. This interaction allows the data from DMS to be transferred to CVIS and vice versa, so it’s fully integrated and easily accessible by the dealer.”

Mr Murray said one of the advantages of CVIS was its ability to communicate quickly between parties, including the customer, the workshop technician, the service advisor and the parts department.

“The technician isn’t walking around searching for parts,” he said. “Everything is at hand because it has been organized beforehand. That means the workshop is more

productive and this spells greater efficiencies and less cost to the dealership.”

Kia’s workshop in Dandenong integrates the CVIS and DMS systems and is the first in the country to have the programs in close operation.

“It is the test pilot for the world,” he said.

“We are the first market in the world with this technology with others around the world to follow,” he said.

Mr Murray said CVIS is an extension of the “superservice” concept designed by global software company Infomedia that started within Kia some years ago.

“CVIS builds on the ‘superservice’ concept,” he said. “It is an initiative from

Kia in Korea but uses the Infomedia software.

“For the customer, CVIS gives confidence in the dealer and it takes the mystery out of the service process.

“We’ve had very good early response. When the dealers get used to it, it will work well.”

Mr Murray said the tools a Kia dealer needs to use CVIS starts with hardware to suit two or three workshop bays.

“That hardware would include two video screens – and many dealers already have these – and the tablets for the service advisors,” he said.

“The cost is minimal – we estimate about $2000 to $3000 for a dealer workshop to have all the tools needed

to implement CVIS. The running cost is then about $350 a month.

“This has been a long time coming and I’m very excited about this.

“It’s very efficient, it means there’s no double handling in the workshop or by the service advisors, it’s better for the dealer, and most importantly it’s better for the customer.”

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Apple shop-front strategy to put Tesla dealerships at high-profile city addresses

Tesla to open store in Martin Place

By NEIL DOWLINGn SYDNEY’S busy Martin Place will soon host its first “car dealership” as Tesla rolls out more company-owned car retail stores in a major push to put its hugely popular electric

vehicles in front of as many adopters as it can.

The CBD showroom, to open in the third quarter of this year, becomes Tesla’s fifth permanent outlet and third stand alone store and begins a wave of showroom

expansions for the car maker.This will be Tesla’s first

stand-alone Sydney store and will feature over two levels to house display vehicles, a design studio and merchandise section.

It will also allow prospective

buyers to test drive Tesla’s sole sedan model, the Model S, using demonstration vehicles housed in the building’s underground carpark.

Tesla marketing and communications manager

Heath Walker told GoAutoNews Premium that the CBD address of the next Tesla store places the company in its preferred location of high-volume traffic zones.

Continued next page

Digital Image: GoAuto





Continued from previous page“We don’t hold stock so

we don’t need a large area to show our products,” he said.

“We work best by having our sales locations in high foot-traffic areas and for us, shopping centres and centre city sites work best.”

Mr Walker said more outlets were planned and would be progressively rolled out across the country.

The expansion will be triggered by the arrival of the Tesla Model X, the all-electric SUV expected in Australia in

the fourth quarter of this year.Mr Walker said reservations

were being held for the Model X but said it wasn’t Tesla policy to release numbers.

The same response was given for the Model 3 reservations, with no official numbers of Australians who have paid a holding fee of $1500 for the budget-priced electric car expected here in 2018.

“Production (of the Model 3) starts in 2017 and will initially be left-hand drive for North American customers,”

Mr Walker said. “The right-hand-drive models will be the last off the production line, so we would be looking at some time in 2018.”

Tesla has two permanent retail displays at Chadstone shopping centre in Melbourne’s east and the Carindale shopping centre in Brisbane’s south-east. It also has a service centre and store in St Leonards on Sydney’s North Shore and a head office and outlet on Church Street in the inner Melbourne suburb of Richmond.

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Europe dumps one gas, finds another while Mercedes goes green with its own solution

Air-conditioning wars spark new gas rules

COMMENT By NEIL DOWLINGn AUSTRALIAN dealers are on notice this year as they introduce a new, environmentally friendly car air-conditioning refrigerant that was the subject of a damning video by Mercedes-Benz and a verbal sparring match between the German company and

French authorities.In spite of the vigorous

campaign by Mercedes to attempt to have the new air-conditioning gas rejected by regulators, Mercedes will be one of the first car-makers to adopt the refrigerant here after installing special equipment to address the safety issues it

was worried about.The argument took place in

2013 when French authorities banned the sale of new Mercedes-Benz vehicles because the car-maker claimed the new mandated gas was dangerous. It claimed the gas was more inflammable than the then current gas and

would cause explosions in an accident.

Mercedes issued a video of a test in which the engine bay of a car burst into flames when sprayed with the new refrigerant, but the maker of the refrigerant said the test did not reflect a real-world accident.

A French court subsequently quashed the government ban on the sale of Mercedes cars.

Now the controversial refrigerant – called R1234yf – is coming to Australia and Mercedes-Benz is progressively fitting it to all but two models.

Continued next page





Continued from previous pageThe R1234yf gas will

replace the hydrofluorocarbon R134a – a change proposed about 10 years ago as a move to further reduce harmful greenhouse gases into the atmosphere. See table above.

Though significantly less harmful to the atmosphere than the refrigerant used before R134a, the chlorofluorocarbon-based R12 that was banned in 1996, it still has a global warming

potential of 1430 times that of CO2. By contrast, the new R1234yf is four times that of CO2.

Europe has banned R134a in all cars from 2017 and approved R1234yf. The US will ban R134a from 2021.

Australia uses R134a on all new cars except for some Mercedes, Jaguar, BMW, Citroen, Chrysler and Jeep models, which have R1234yf.

In a further twist to the Mercedes story, the company has said the R1234yf gas will

be used in all 2017 model cars except the E-Class and S-Class.

In E-Class and S-Class models, Mercedes proposes to use an even more benign refrigerant that is based on

carbon-dioxide and referred to as the CO2 refrigerant R744. This is particularly

important because on contact with air, it takes only a few days to break down.

Since 2013 when Mercedes-Benz refused to embrace R1234yf over owner-safety concerns, despite a mandate by the European Commission (EC), the company has designed a

string of safety measures. These include patenting a

way to isolate the refrigerant from hot engine parts in the event of an accident. With the safety issue addressed to its satisfaction, it has agreed with the EC to use the gas on future vehicles until a better solution is found.

Part of this agreement is based on the ready availability of R1234yf and the fact it is the only one favoured by the EC.

Continued next page

WHEN REFRIGERANT EMISSIONS RATE x CO2 ADVANTAGE DISADVANTAGE

Soon CO2 1 Least harm

Operates undervery high pressure.

Cannot be usedin current cars

Now R1234yf 4 x CO2 Can be used in current cars Flammable

1996 R134a 1430 x CO2 Replaced R12 Strong greenhouse gas

Up to 1996 R12 N/AChlorofluorocarbon

(CFC) was cheap and plentiful

Destroying the ozone layer

In E-Class and S-Class models, Mercedes proposes to use an even more benign

refrigerant that is based on carbon-dioxide

HOW THEY RATE





Continued from previous pageHowever, Mercedes is

working on ultimately using the R744 CO2 refrigerant in all its cars. The gas is used on large commercial refrigeration coolrooms and the current problem is poor supply from global manufacturers.

Mercedes-Benz Australia/ Pacific senior manager of public relations, product and corporate communications David McCarthy said the CO2 gas is intended for the E-Class and S-Class models.

“Mercedes-Benz is one of the first to order the new CO2 air-conditioning refrigerant but it is limited in supply,” he said.

“In the meantime we have put all safety measures in place and feel confident about using the R1234yf refrigerant.”

He said there was no date for the introduction of the CO2 refrigerant into Australia because of the small volume available globally.

“It is regarded as being very efficient and very environmentally friendly,” he said.

He said the CO2 gas would be fitted first to the E-Class that will be launched in Australia later this year.

The problem with R744 is that its CO2 base needs 10 times the pressure in the air-conditioning system than R134a gas.

That means the entire air conditioning system has to be built to cope with the pressure, making it impossible to use in an existing system, and will make it very expensive to produce and service.

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ACCC slammed for ‘setting policy’ on car imports

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PASSENGER -10,335

13148

59

-36

4,841

80

-863

-119

-4,083

-3,921

-1,365

-1,575

-34

587

919

2,602

8,266

2,221

-166

629

1,016

3,517

80

7,734

MICRO

UPPER LARGE

TOTAL MARKET

SUV LARGE

SUV

LIGHT

PEOPLE MOVERS

SUV UPPER LARGE

LIGHT COMMERCIAL

SMALL

SPORTS

LIGHT BUSES < 20 Seats

HEAVY COMMERCIAL

MEDIUM

SUV SMALL

LIGHT BUSES => 20 Seats

TOTAL MARKET

LARGE

SUV MEDIUM

Vans/CC <=2.5t

Vans/CC 2.5-3.5t

PU/CC 4x2

PU/CC 4x4

HEAVY COMMERCIALSOURCE: VFACTS

15000100005000-5000 0-10000

Passenger cars slide as medium SUVs shineYear-on-year contrast shows where the market is headed in 2016

n IT IS pretty clear that the market shifted from low-margin micro, light and small cars to SUVs in the first quarter of this year compared with 12 months ago as the former lost ground and the latter firmed substantially.

This was especially the case with the medium-SUV segment, which is capable of delivering healthy profit margins in showrooms. This medium sector was the star performer in SUV segments with four times the volume growth than the small-SUV and large-SUV sectors. Put a lot of that down to the Hyundai Tuscon and the Subaru Forester. The Mazda CX-3 accounted for growth in the small-SUV market.

But, in the light and small car segments, buyers put a scythe through sales charts in the first quarter of 2016 compared with the same quarter last year as passenger cars continue to steadily lose favour.

Ford Focus, Holden Cruze, Nissan Pulsar and even the Toyota Corolla lost significant ground while the Subaru Impreza had a very good quarter compared with the same time last year.

By JOHN MELLOR



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