On this page we give you a snapshot of the Australian automotive industry in early 2014. We look at: the companies that make cars in Australia and the models they make growth in the Australian vehicle market since 1950 the best selling marques determinants of vehicle sales - especially price movements growth in the Australian vehicle parc   Companies The Australian vehicle market is supplied by 3 local car manufacturers, however between May 2013 and February 2014 all 3 companies announced that they would cease manufacturing in Australia, Ford in 2016 and GM Holden and Toyota in 2017. They follow Mitsubishi Motors Australia which ceased manufacturing in 2008, and will import all vehicles for sale in Australia once production ends. The Australian market is already supplied by most world light vehicle makers. For the moment each of the car manufacturers in Australia make a range of vehicle variants, most essentially based on one platform and with a high degree of commonality across derivatives. The table below sets out key models and body types, but does not specify all variants. Australian Manufacturers and Models Manufacturer Models Variants Segment/Engines Ford Falcon Territory sedan and utility AWD/RWD wagon Large PMV and PUCC - T4, I6 & V8 Large SUV - I6, DTV6 Holden(GM) Commodore Statesman Caprice Cruze sedan, wagon and utility sedan sedan and hatch Large PMV and PUCC - V6 & V8 Upper large PMV - V6 & V8 Small - T4 and I4 Toyota Camry Aurion (Camry based) sedan sedan Medium PMV - I4 & hybrid Large PMV - V6 The Ford I6 engine is available with either petrol or dedicated LPG fuel, as is the Holden V6 engine. Other engines are petrol, with the exception of the diesel engines now available in most Ford Territory variants. Toyota released the hybrid Camry in February 2010, and this model was replaced by the new model in early 2012. The level of production has varied considerably over the decades, with the reduction in import tariffs leading to the removal of smaller cars from local assembly and a focus on the larger cars and their variants shown in the above table. Production of small cars ended with the Toyota Corolla in 1999, however Holden commenced assembly of the Cruze small car, replacing imported models from April 2011. This focus on large cars has had mixed results for the industry, with the specialisation leading to record exports in 2005 and again in 2008, but exposing the industry to the impact of higher fuel prices since 2005. By the end of 2008 export markets were turning down at the same time that the global financial crisis was increasingly affecting the Australian vehicle market and 2009 saw exports slump while domestic sales of locally made vehicles continued their fall. In 2008 total vehicle production was 324,684 light vehicles with a record 161,956 exported, but production fell in 2009 and has fluctuated around this lower level since. In 2013 production was down to 210,538 vehicles with about 90,000 exported. All 3 Australian car manufacturers also import CBU vehicles to complete their range, with light and small cars, sports utility vehicles and light commercial vehicles being the predominant imports. Since the 1970s, the leading pure importers have been the Japanese companies, but during the 1990s penetration of the Australian market by Korean manufacturers was marked. European imports tended to concentrate in the prestige and luxury car market, but over the last decade there has been a significant resurgence in non luxury European imports, helped in more recent years by the fall in the value of the Euro against the AUD. Heavy commercial vehicles are imported from most of the major makers and there are 3 assembly plants in Australia - for Iveco, Kenworth and Volvo (including Mack) - which specialise in the heaviest types of trucks and have assembled around 5,000 annually in recent years. In addition to this there is significant bus body building onto imported chassis. Vehicle production - Australia Thousand vehicles [Source: ABS, various publications; Department of Industry, Key automotive statistics and preceding; AAI estimates based on varied sources]   Market Growth The Australian vehicle market is now considered a mature market, however over recent decades there have been large fluctuations in vehicle sales. As the chart below shows, the Australian vehicle market grew almost continuously to a record in 1985, but then fell back because of the weak exchange rate which raised vehicle prices markedly and was followed by the early 1990s recession. Growth resumed in the mid 1990s and sales reached a new record in 1998. After some stagnation, new growth emerged in 2002 with record sales and then records were set in 4 of the next 5 years, ending with sales above 1 million vehicles for the first time in 2007. Since then sales have fluctuated, but have exceeded 1 million each year except for 2009 which was impacted by the worldwide economic slowdown. 2012 was a record at 1.11 million vehicles, topped by 2013 with 1.14 million. Vehicle Sales - Australia Thousand vehicles [Source: VFACTS vehicle sales data, PAXUS and ABS] There have been many shifts in the types of vehicles sold over the decades and the next chart shows how the growth has been shared since the early 1990s, with: the increasing range of SUVs taking much of the market growth relatively stagnant sales for conventional cars and wagons since 2000 both light and heavy truck sales strengthening considerably since 2000 after a fairly stagnant phase from the mid 1980s. Vehicle Sales by Type - Australia Thousand vehicles [Source: VFACTS vehicle sales data]   Leading Marques The strongest selling marques have typically been the companies with Australian car manufacturing plants - Ford, Holden, Mitsubishi, Nissan and Toyota - but with Nissan ceasing local manufacture of cars in 1992 and Mitsubishi in 2008, along with increasing popularity of the mostly imported smaller cars and SUVs, the ranking of marques has changed somewhat. Toyota, with its mix of local manufacture, the popular imported Corolla and the wide range of imported light commercials and SUVs increased its sales every year from 2002 to 2008 and was market leader for the 11th year in succession in 2013. Holden and Ford have not fared as well since 2000 and have lost ground - the damage to their locally made car sales from high fuel prices has been significant, but unlike Toyota they have not been able to leverage their imports sufficiently to offset those losses. Japanese imported brands have been strong in the Australian market for the last 4 decades and their sales have typically strengthened in recent years. As importers Nissan and Mitsubishi retain a strong presence in the market, while Mazda became the 3rd largest volume marque in 2012, passing Ford, and retained that position in 2013. With fluctuations, Honda, Subaru and Suzuki have also made strong gains. During the 1990s Hyundai became a strong participant in the Australian market and while sales have been variable they rose strongly from 2009 to 2012, lifting the company to 4th strongest selling marque in 2012 which it repeated in 2013 with another strong volume rise. Kia was a later entry but has consolidated its presence in Australia in recent years. Volkswagen is now the strongest European light vehicle marque in Australia, at 8th best selling in 2012 and 2013 following rapid growth last decade, but most European marques including Audi, BMW, Mercedes-Benz, Peugeot and Porsche and Renault have strengthened their sales considerably in Australia during the last 10 years. The chart below shows sales by marque at 5 year intervals since 1994, but it does not include most European brands and other lower volume marques. Vehicle Sales by Marque - Australia Thousand vehicles [Source: VFACTS vehicle sales data]   Determinants of vehicle sales Vehicle sales in Australia are influenced by the whole array of economic factors that affect employment, income growth and relative price movements of cars. Australian economic growth is strongly influenced by international factors and typically recessions and periods of slow growth in Australia align with similar movements internationally, although Australia has often not suffered as severe slowing. However it has generally been the case that Australian vehicle sales fall in recessions and either fall or stagnate when economic growth slows noticeably. During the 1970s and 1980s inflation became more of a problem in Australia, as it did in much of the rest of the world. At times of high inflation, incomes sometimes lagged, reducing or restricting the growth in household spending power, which then affected the real growth in consumption and the pattern of spending. Because Australia has had a relatively high dependence on imported automotive products - for components assembled into Australian made cars and increasingly over the last 2 decades for CBU imports - and has an exchange rate which has fluctuated significantly, vehicle prices in Australia have consequently also fluctuated markedly. The chart below shows indexes of the prices of vehicles in Australia since the mid 1980s - the detailed series are based on car price series constructed by the former Automotive Industry Authority and since continued and expanded by Australian Automotive Intelligence. The CPI motor vehicles index is from the ABS Consumer Price Index and while it fluctuates at about the same time as the other series, it has generally fallen since the mid 1990s. The fall in the CPI measure is largely because the series adjusts for quality changes in vehicles - that is, specification improvements - whereas the other series are based on recommended retail prices. The strong rises in vehicle prices between 1984 and 1988 were largely the result of the AUD falling markedly against the JPY. These rises were much greater than inflation generally and also than increases in income and led to the marked fall in vehicle sales shown in the sales chart above. However, a generally stronger exchange rate and tariff reductions on imported vehicles brought down vehicle prices in the second half of the 1990s, and they have remained around these lower levels since, helping the market to achieve record sales in 7 of the years from 2002 to 2013. Vehicle price indexes December quarter 1984 = 100 [Source: ABS and Australian Automotive Intelligence]   Vehicle Parc Despite being a relatively mature market, the number of vehicles on Australian roads has continued to grow strongly, as the chart below shows. Much of this growth was achieved by extending the life of vehicles - the average age of vehicles on Australian roads rose from 7.1 years in 1979 to 10.7 years in 1998 but with the stronger growth in sales, scrappage of older vehicles lifted again reducing average vehicle age to 9.9 years in March 2008 and 2009. However, the average age has edged up since to marginally above 10 years. Australian Vehicle Parc Million vehicles [Source: Australian Bureau of Statistics, Motor Vehicle Census, Australia, catalogue no 9309.0, various years.] The charts in this snapshot have been reproduced from the 2014 Australian Automotive Intelligence Yearbook - order your copy now!