User-chooser business buyers push compact SUVs closer to Australian market dominance

[jpd80]

User-chooser business buyers push compact SUVs closer to Australian market dominance
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22 August 2011

By MARTON PETTENDY

THE popularity of small SUVs continues to boom in Australia, where compact crossovers
keep closing in on small and light-sized passenger cars as the nation’s dominant new-vehicle type.

While sales of medium and large SUVs have slumped by 14.5 and 7.8 per cent respectively
to July this year, the compact SUV sales surge continued almost unabated (up 2.1 per cent)
in a total SUV market that is down 2.9 per cent.

In fact, apart from 4x4 utes and luxury passenger cars and SUVs, compact SUV is the only
segment to generate sales growth in a total new-vehicle market that has slumped by 5.9 per
cent so far in 2011, thanks largely to an 8.0 per cent decline in passenger car sales.

This year passenger cars have accounted for 56 per cent of all new vehicles sold (down 1.2 percentage points),
while SUVs represented 23.3 per cent (up 0.7), outstripping the 0.6 percentage point share
growth of light commercials (18.1 per cent).

Having overtaken the declining large car segment (which 4x4 utes have also done this year),
the compact SUV sector (67,777 sales to July this year) now lies within 11,250 sales of
light cars – Australia’s second most popular vehicle type with 79,026 sales, behind small cars (139,263).

Market InsightMarket Insight 2011 center imageLeft: Nissan X-Trail, Hyundai ix35, Toyota RAV4.

However, closer inspection of Australia’s love affair with small SUVs shows that most growth in
the segment comes from fleet buyers, with rental, government and, in particular, business
buyers representing an increasingly large chunk of sales.

Just as compact high-riding wagons are increasingly being substituted for traditional passenger cars,
so too is the unprecedented growth in ‘user-chooser’ sales blurring the lines between sales to private
individuals and buyers of company cars, as more Australians choose to salary-sacrifice and/or
undertake novated vehicle leases.

Some readers might be surprised to learn that a higher proportion of SUV sales go to fleet buyers
than passenger cars, with 57 per cent of all new cars going to private buyers and just 51 per cent
of all new SUVs going to non-fleet purchasers, while only 27 per cent of light commercial customers
are private individuals (for an overall average of 50 per cent).

With only six exceptions, sales of every mainstream compact SUV are down this year, meaning all of
the segment’s growth has come from Ford’s evergreen Escape (up 26.3 per cent), Hyundai’s relatively
new ix35 (up 91.4 per cent), Kia’s Sportage (up 30.4 per cent), Mitsubishi’s sub-compact ASX (up a massive 945 per cent)
and Nissan’s X-Trail (up 41.2 per cent) and Dualis (up 15.2 per cent).

Subaru’s Forester has been the country’s top-selling compact SUV since 2008 and, despite a
13.2 per cent sales slide, looks set to claim that title for the fourth consecutive year,
but last month it also attracted more ‘business’ buyers than any other compact SUV.

More than half of all Forester sales in July went to business buyers, a feat unmatched by any
other compact SUV except Subaru’s other small crossover, the Outback.

Conversely, Mazda’s CX-7 attracted a higher proportion of private buyers than any other
compact SUV last month, when it was the fifth-best-selling vehicle in its class, but so far
this year continues to trail the Forester, ix35, RAV4, X-Trail and Dualis.

Despite the fact that – at odds with the rest of the Subaru model range, which traditionally attracts
a strong mix of private buyers – relatively few private individuals have purchased the Forester this year,
the long-running Japanese SUV continues to hold a dominant 11.2 per cent share of the compact SUV segment.

Closing the gap is the Hyundai’s fast-selling ix35, which now holds a 10 per cent share of the segment in
second place. Once again, however, last month more than 400 ix35s went to businesses from a total
of 1063 sales, just 18 sales short of the Forester.

Unlike the Forester, which remains one of the few mainstream compact SUVs not to be available in
a cut-price front-wheel drive variant, almost half of all ix35 buyers were private individuals, but
the ix35 also attracted more than 1500 government sales – more than any other compact SUV.

Of course, the success of the three-year-old Forester and the ix35 – launched here in
February 2010 – has come at the expense of Toyota’s once-dominant RAV4, the current generation
of which dates back to 2006, before a 2WD version was released here in April 2010.

Last month the vast majority of RAV4 buyers were private individuals and Toyota’s stalwart
compact SUV attracted fewer business and government buyers than either the Forester or ix35.

RAV4 sales were down more than 20 per cent in July and remain down 19.5 per cent year-to-date.

Having snared just 9.5 per cent of all compact SUV sales so far this year – its lowest share of
the segment for some time – the RAV4 is in danger of losing third place to Nissan’s X-Trail,
showing just how significant fleet buyers have become in the burgeoning compact SUV class.


Market Insight Market Insight 2011 Mr popular: Subaru’s Forester has been the country’s top-selling
compact SUV since 2008 and looks set to claim that title for the fourth consecutive year.

[MAGPIE]

So a Outback is a small crossover aye

A wagon with a jacked up ride height is still a wagon you morons

[jpd80]

Originally Posted by MAGPIE

So a Outback is a small crossover aye

A wagon with a jacked up ride height is still a wagon you morons

I gave up on description of segments a while ago, mid sized cars are now close to large cars
while small SUVs are now the same size as early 2000s mid sized SUVs....

I think a jacked up hatchback would pass as a small FWD crossover these days...

I'm hearing and reading a lot of stories about Hyundai i30 and iX35 making big inroads in fleets and novated leases,
it seems like Corolla and in particular, RAV4 are feeling the pinch, the latter is getting quite stale with no update in sight..

[naddis01]

Watch your back Small cars, small SUV's are after you.

[jpd80]

Originally Posted by naddis01

Watch your back Small cars, small SUV's are after you.

The movers and shakers are definitly:
- Small Cars
- Light Cars
- Small SUVs
- Medium SUVs
- 4x4 Pick ups and cab chassis.

Medium car trend is flat as a pancake and large car sales are sinking like a stone

[naddis01]

From reading the story it sounds like small SUV's are heading for the number one segment spot.

From looking at the graph, yes small SUV's are increasing especially since mid 09 but they are still along way off top spot. Small cars still have double the market share and 4x4 utes seem to have increased by as much over the period of the graph (although they seem more volitile). I can see the 4x4 ute market continuing to increase as well with new (and better) products like Ranger, BT50, Colorado next year, Amorak et al coming online now or soon.

Large cars are definately sinking like a stone and look like they will be down to 6th placed segment by the end of the year. If that trend continues they will be down below Medium cars within a couple of years.

There are a few other things that stand out to me in that graph. When was the Territory first released? May 04? What happened in Jan 06? Light cars jumped and luxury cars tanked.

[madmatty]

Originally Posted by MAGPIE

So a Outback is a small crossover aye

A wagon with a jacked up ride height is still a wagon you morons

the article mentions subaru forester not the outback, witch is a jacked up liberty wagon

[jpd80]

Small cars is the segment to be in but looking at the market break up:

- Small Cars - 23%
- Light Cars - 15%
- Small SUVs - 13%
- 4x4 Pick ups and cab chassis - 10%
- Medium SUVs - 8%
- Large cars - 8%
- Medium cars - 7%
- 4x2 Ute - 7%

The top five segments covers approximately 70% of sales in the Australian market....

[BigAL_250]

Originally Posted by madmatty

the article mentions subaru forester not the outback, witch is a jacked up liberty wagon

Maybe you should read the article again.

Subaru’s Forester has been the country’s top-selling compact SUV since 2008 and, despite a
13.2 per cent sales slide, looks set to claim that title for the fourth consecutive year,
but last month it also attracted more ‘business’ buyers than any other compact SUV.

More than half of all Forester sales in July went to business buyers, a feat unmatched by any
other compact SUV except Subaru’s other small crossover, the Outback.

[Simple6]

So they're saying a Rav4 is a compact SUV? Those things are huge when you compare back to the original 3 door. I guess they'll have to have a micro segment soon

[aussie muscle]

Originally Posted by fowlerj

So they're saying a Rav4 is a compact SUV? Those things are huge when you compare back to the original 3 door. I guess they'll have to have a micro segment soon

i agree. they are almost as big as a prado now.

[Road_Warrior]

Ford needs the Kuga, yesterday.

[BrisVegas]

Originally Posted by Road_Warrior

Ford needs the Kuga, yesterday.

absolutely. The Vertrek/Kuga or whatever it's gonna be called needs to be here asap now that the Focus is out.

[Wretched]

Like others have said Ford need bring in the Kuga, it is a good looking car and offers good value. Our high $$ should make it attractive and a reasonable price to import and compete with the VW Tiguan.

[whynot]

And the article completely ignores the impact of the mandatory five stars (in some cases 5.5 stars) greenhouse rating imposed by governments and some private fleets. It will be interesting to watch how the Territory goes over the next six months, particularly the RWD diesel.