Soft year ahead, says Holden

Slow sales will be a persistent theme in the new car market to the end of the year because of a fall in consumer confidence, according to Holden Executive Director, Sales and Marketing, Philip Brook.

"It's a bit softer than we expected it to be at the start of the year. We're not expecting it to get any worse, but we're not expecting it to get dramatically better through this year,” he said this week.

The decline in sales growth and buyer confidence has affected both private and fleet sales, said Brook.

“If you dig deeper than the VFACTS numbers and look at buyer types, you're seeing a softening of the market -- private is pretty soft and small fleet are soft as well -- and that is on the back of consumer sentiment, a bit of negative on jobs."

According to the VFACTS figures to the end of May, the market is down 2.9 percent year-to-date.

"It's softer relative to last year but it's still an opportunity for everyone be-cause it's 1.1 million units.

"January, February were OK, March and April a little confusing because you had Easter in different months last year and you also had ANZAC Day close to Easter.

"May is, to-date, probably the softest we've seen and I think people were probably delivered cars that were from previous months' orders, and this month is a bit soft as well."

The mining and construction boom states of Queensland and Western Aus-tralia are down on volume significantly over last year.

Last month Queensland was down 4.8 per cent in May (4.4 per cent YTD) and Western Australia was 6.5 per cent and 10.4 per cent in YTD terms.

"There is not quite as much investment as we saw in the last few years, which have been a boom -- it had to moderate at some stage," said Brook.

The Australian market is still big but fragmenting, a point Brook high-lighted with the rise of relatively small players such as Jeep (up 38.7 per cent) and Isuzu Ute (up 46.1 per cent).

"What we're seeing is more fragmentation of the market. The likes of Jeep, Isuzu, some of the smaller ones, then you look at Benz, BMW, Porsche -- Benz was in the top 10 for the first time in a while."

Holden is happy to finally be a part of the compact SUV segment, which continues to boom, with sales up 14.4 per cent to the end of May.

"Trax is doing very well for us, too. We did 590 or so last month. That small SUV market is still growing strongly."

Best news for Holden this year, however, is a 60 per cent increase in sales of its most important model, the relatively fresh VF Commodore, helping in no small way to keep it on the positive side of the growth ledger, the brand lifting sales to the tune of 8.2 per cent to May.

"With Commodore, it's critical to our business, there's no question about that. It's performing well -- up 60 per cent on a year-to-date basis."

Significantly, Brook said a rich model mix – including V8 variants, which now account for 37 per cent of Commodore sales – is providing a shot in the arm for Holden's bottom line in 2014.

"The really positive thing about it is that the mix of cars is strong -- a lot of top-end product," he said.