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SA: Car industry posts second-best year but gloom mounts

By Tim Dornin and Bonny Symons-Brown
06 Jan 2009 4:43 PM

ADELAIDE, Jan 6 AAP - Australia's vehicle industry has posted its second best year on record, but sales are tipped to slide in 2009 as importers and producers continue to grapple with the global downturn.

The Federal Chamber of Automotive Industries (FCAI) said on Tuesday consumers ignored tough times last year to buy more than one million vehicles.

Total demand was down 3.6 per cent on the record 1,049,982 units sold in 2007, but the industry still retailed 1,012,164 new cars and trucks.

"It's a great result, it's an outstanding result, it's the second highest outcome on record," FCAI chief executive Andrew McKellar told reporters in Sydney.

"Indeed, it's a testament to the competitive nature of the Australian motor industry.

"Australia's three local manufacturers remain the top three selling brands, reinforcing the importance of the local manufacturing sector as a cornerstone of the Australian (motor) industry."

But after sales fell 22 per cent in November and 11.3 per cent in December, the FCAI said demand was likely to be down by up to 13 per cent this year.

It tipped a total market of about 880,000 vehicles, while GM Holden's forecast was even more gloomy suggesting demand could fall as low as 850,000.

"We must be realistic about the outlook for the year ahead and acknowledge the impact that the global financial crisis is having on the broader economy," Mr McKellar said.

He said the downturn would also put pressure on jobs across the motor sector.

"There's going to be pressure for rationalisation, and I think it would be naive to suggest that everyone in the industry is going to come out unscathed, but clearly reducing employment is not a costless process," Mr McKellar said.

"It has an impact on those individuals that are affected directly but it also has a broader financial cost that comes with it.

"So I have no doubt that those in the industry will be seeking to hold off on those sorts of decisions for as long as they possibly can."

Mr McKellar said there were positives that would underpin demand in 2009, including lower fuel prices, reduced interest rates and the stimulus measures from the federal government.

Holden's executive director of sales and marketing Alan Batey said the weaker Australian dollar would also give local producers a competitive advantage in 2009 and could help drive exports in the second half of the year.

But he said that would depend on key markets like the United States and the Middle East recovering.

There was little sign of that in December with US sales crashing - Chrysler reporting a 53 per cent fall, and Ford, GM and Toyota suffered drops between 30 and 37 per cent.

Toyota was Australia's best-selling brand in 2008 with 238,983 vehicles followed by Holden with 130,338 and Ford on 104,715.

Toyota's senior executive director of sales and marketing David Buttner said the company's record result stemmed from its strong commitment to the domestic market.

"It is not possible to overstate the importance of a large-volume car maker demonstrating its commitment to the market," Mr Buttner said.

"Toyota's strong investment in local manufacturing - and its commitment to its sales network and their customers - provides a level of confidence to everyone in the supply chain."

Mr Buttner pointed to steady demand for Toyota vehicles in the second half of the year, when the economic downturn took hold.

"Monthly average sales for Toyota in the second half were in excess of 18,590, compared with 19,900 for the year, indicating high levels of customer support," he said.

Despite Toyota's market dominance, Holden had the most popular car for the 13th consecutive year, selling 51,093 Commodores compared with sales of 47,901 for the Toyota Corolla.

Other top-selling models in 2008 included the Mazda3 (33,755), Ford Falcon (31,936), Toyota Yaris (26,097), Toyota HiLux 4x4 (25,626), Toyota Camry (23,067), Mitsubishi Lancer (19,688), Toyota Aurion (19,562) and the Toyota HiLux 4x2 (17,330).

Figures released on Tuesday showed bicycle sales continuing to outstrip those of vehicles, driven by the economic downturn, health issues and climate change.

The Cycling Promotion Fund (CPF) said 1,401,675 bicycles were sold last year, down from 1,427,738 in 2007.