2014’s Winners and Losers – Lessons from the Car Market

A Toyota Corolla as seen on the official websiteA newspaper article about new car sales caught my eye over the weekend. The article was in the Adelaide Advertiser on Saturday the 9th of January. It shared market data regarding the sales increases and decreases of various new car brands, models and classes of cars.

2014 Winners

The Advertiser article provided interesting details regarding the sales performance of various brands of cars sold in Australia during the 2014 calendar year.  For example, the Toyota Corolla was Australia’s top seller for the second year in a row followed closely by the Mazda 3.  The Toyota HiLux was next followed by the Hyundai i30 with the Holden Commodore coming 5th. The HiLux was one of three utes in the Top 10.

The article reported that most luxury car brands reported increases in sales over the last year and that SUV sales hit a new high accounting for more than 30 percent of new car sales.  People movers were also up driven largely by sales of the Honda Odyssey.

2014 Losers

On the loser side of the ledger the Advertiser article noted production of locally built vehicles (Including Holden, Ford and Toyota) hit a 61 year low.  In 2014 more than 90 percent of cars sold were imported.  Established brands were also on the loser side of the ledger with eight of the Top 10 brands reporting a decline in sales.

Sales of ‘Micro’ sized and highly fuel efficient cars such as the Mitsubishi Mirage, Holden Barina Spark and Nissan Micra dropped by 30 percent in 2014.  Diesel passenger car sales dropped by 17 percent and sales of Hybrid cars to private buyers fell by 30 percent.

Lessons for Marketers

The marketing of motor vehicles is usually restricted to the big corporations and brands.  However, I feel business owners can identify areas in which these big brands have not read the marketplace as well as they would have liked.

The most important lesson that this article spells out for me is the need to understand the marketplace and in particular the needs of your customers A.K.A. Your Primary Target Markets.

There is significant noise across numerous communication channels about consumers tightening their belts in certain sectors, about the interest in fuel efficiency and the desire to buy local and support local industry whilst reducing carbon miles.

However, in practice this did not play out as expected for the car industry in 2014.  Customer needs within the various motor vehicle market segments (i.e. Small Cars, Sedan, People Movers etc.) were obviously significantly different to the macro market feedback being reported.

The budget and fuel efficient vehicles declined significantly whilst luxury cars and SUVs increased dramatically.  So instead of saving money on the upfront purchase price and then enjoying increased cost savings through fuel inefficiencies the Australian marketplace have voted with their disposable income to do the opposite.

The success of the luxury car brands in 2015 indicates that customers are obviously not always cost or price driven and are willing to pay for brands, prestige and luxuries, Marketers just need to know precisely what is or is-not important to their customers

Although this Advertiser article summarizes the performance of international big dollar brands the lessons apply to all businesses.

At a small to medium size business level it is just as important if not more important to get things right in terms of understanding the needs of your Primary Target Markets.

If you are keen to delve further into planning your marketing execution for the 2015 year and/or understanding your target markets more closely then a couple of our previous articles might be useful to peruse including The Baker Marketing: 2014 Marketing Summer School Part  2: Target Market Selection and Part 3: Brand Positioning – Making the right impression

In the meantime I hope that your analysis of your own 2014 trading year is positive and that you are off to a great start for the 2015 year.



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