One message has been lost among Toyota's announcement that the Altona plant would commence building hybrid Camrys from 2010. Cars in the VFACTS medium segment are struggling for sales.
Industry pundits have poured over the VFACTS large car figures and bewailed the impending death of the local manufacturing industry, but there's a tendency to forget that local manufacturers are either directly (Toyota) or indirectly dependent on medium car sales for continuing profitability.
Midsize cars are not doing it tough in the same way large cars are, but look at the year-to-date figures for the segment. Only Chrysler Sebring, Dodge Avenger, Ford Mondeo, Holden Epica, Kia Magentis, Renault Laguna, Skoda Octavia, Volvo V50, S60 and V70 have shown positive growth this year -- hardly household names, and most of those are new cars which either weren't released this time last year or had only sold a trickle up to the end of May '07. Of those, only the Dodge, Ford, Holden and Skoda were not on sale during the first five months of 2007.
Sluggish sales have thus far afflicted Honda Accord Euro (anticipating a new model shortly), Hyundai Sonata (recently upgraded), Mazda6 (recently released new model), Peugeot 407, Renault Scenic, Saab 9-3, Toyota Camry, Volkswagen Jetta, Passat, and the Volvo S40. The YTD sales total for the segment is down 1150 units, a 3.8 per cent variance.
What consumers regard as a medium-sized car isn't necessarily what passes for one within the market positioning regime of VFACTS segmentation.
With the bracket creep that goes with VFACTS segments as a matter of course, small cars are the new medium cars and medium cars are the new large cars. Once a truly midsize car, the Camry has grown over time and has vicariously super-sized its logical competitors, without the Toyota or its peers moving up to a segment for a larger car.
The models have grown, but in reality, the market's preference has remained principally where it was 15 or 30 years ago -- notwithstanding the current market trend away from vehicles that use more fuel.
Think back to how popular the early Commodores were from the late 70s up to the mid 80s. The last of those, the VL model was about 50mm shorter and 100mm narrower than the current Camry -- a nominal medium car, currently.
Medium cars now -- and it's not just Camry, it's about Mondeo and Mazda6 too -- are larger than large cars from 20 years ago. Perhaps that's why they don't sell in the numbers they once did. Medium cars are too large, particularly without the 'local manufacturing and high-torque/rear-wheel drive' sentiment that continues to drive sales of large cars.
Cars such as the Magentis, Octavia and the V50 -- three cars that have enjoyed sales growth this year -- are tending to be more compact, by comparison with their competitors.
Oversized 'Small' cars like Corollas prove the point that medium cars would still sell if they were true midsize cars. The Corolla boasts interior space similar to that of the first locally manufactured Camrys -- and the Corolla is challenging Commodore for the title of Australia's most popular car.
Just to develop that argument further, the current Camry's sales have slipped in year-to-date comparison. Toyota sold 939 fewer units of Camry for 2008, as at the end of May, than for the first five months of 2007. The 2007 YTD figure was a high-point, but against a background of running out an older model in 2006.
Is it cynical to question the timing of Toyota's Camry hybrid announcement, given the current car is no more economical and cleaner-running than the Aurion stablemate, with a larger-displacement V6?
So perhaps it's not just the actual physical size of the car, but the relative profligacy of these cars; the way they consume fuel and emit CO2.
Consider one example of the way medium segment cars could regain their relevance: Ford's Mondeo. The Mondeo is the only larger medium-segment car that is picking up sales in the current climate -- and Ford attributes that to finally resolving the model mix in favour of the diesel Mondeo TDCi variants.
According to Ford's Vice President Marketing & Sales, Mark Winslow, diesel variants account for 45 to 50 per cent of all Mondeo sales.
"We didn't call the diesel availability right," he says, explaining the well-regarded Mondeo's slow start in the market. A wagon variant for the Mondeo range is yet to be confirmed, but all the signs are looking good for the arrival of that body style in the country and that will further improve the sales outlook for the mid-size Ford.
It wasn't just Ford caught on the hop by the popularity of the diesel Mondeo. Holden has obviously taken note also and will shortly introduce a diesel-engined Epica.
With more fuel-efficient models in the segment, sales should pick up, but Holden's Epica, with low running costs and a favourable purchasing price hints that expense alone is not the only factor working against medium car sales.
If sales don't pick up with the introduction of more frugal models, we come back to our original argument that the market perceives medium-segment cars to be every bit as bloated as large cars.
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