Toyota - The Wheels Report 2014

RESULTS

Needs to apply more in light of intense competition. Share has slipped but Toyota retains solid grasp on number one position. Growth tricky to come by but recently updated Yaris and new HiLux and Camry should keep competitors at bay in key segments. If all else fails, marketing prowess should provide worthy safety net.

Rank*: 1st
Sales*: 168,491
2014 sales forecast: 197,000
Wheels prediction for 2015: 1st (by 60,000 bumpers)
*As at October 2014

TOYOTA has dominated the Australian market for more than a decade. In 1996 it was outgunned by Ford and Holden but by 1997 it had overtaken Holden to sit behind Ford in the sales race.

While the two traditional combatants worked out ways to muscle sales off each other – relying heavily on their main weapons, the locally produced large cars – Toyota not so quietly assumed the number one spot in 1998. A tussle with Holden ensued over coming years but since 2003 Toyota has remained unchallenged, at one stage commanding almost one in every four new vehicle sales.

The Japanese brand’s market share has since slipped, but the grasp on that top sales spot has never been firmer – a bit like Mercedes in Formula One this year as its rivals fought over the minor placings.

Toyota has never abandoned its goal of achieving 25 percent market share, however unrealistic that may seem in a mature market with 60-odd car brands and 1.1 million annual sales.

In 2014 Toyota has shed more share, but still commands 18.2 percent of the market. It also sells the country’s most popular car – the Corolla small hatchback and sedan – and is strong in almost every segment it competes in, from Camry (number one in the medium segment), Yaris (a close second in light) and HiLux (still the top-selling ute despite a late surge from Ford’s Ranger) to the RAV4 (second in medium SUV), Prado (second in large SUV) and Kluger (third in large SUV). Even the 86 two-door coupe leads the sports car segment and brings decent volume; it comfortably outsells many family cars, including the Honda Accord, Subaru Liberty and Hyundai i40.

The Aurion is arguably its most disappointing model, comprehensively outsold even by the Ford Falcon – with the Commodore somewhere over the horizon. But it’s a market Toyota has all but given up on, instead investing in the Camry that uses the same body but is more frugal and, therefore, more appealing to the fleets that flock to it.

OPPORTUNITIES

THE Camry gains a major update in the first half of 2015. Rather than the new wheels and nose that typify most facelifts, the Camry gets fresh sheetmetal on all panels except the roof. The interior will be revised, although not as comprehensively as Camrys sold elsewhere; put that one down to the cost, especially considering local production ceases by the end of 2017. Suspension will also be tweaked although the four-cylinder drivetrains – including a hybrid – are unchanged.

It will be accompanied by a milder facelift to the V6-powered Aurion.

Bigger news comes in the form of an all-new HiLux, a model that can’t come soon enough for dealers forced to lower prices to compete with newer, more competent utes. The long awaited new HiLux – the current shape went on sale in 2005 – is expected in the second half of 2015.

The HiLux-based Fortuner SUV, which has been spotted testing in Australia, is another due later in the year to rival Ford’s upcoming Everest and its competitors.

Toyota is also keen to defend its traditional SUV turf, although there’s no major model activity. The expected sub-RAV4 small SUV is years away and the Prado and LandCruiser will soldier on with some special editions that add more features and a dose of marketing activity. Similarly the Kluger and RAV4 should get a tickle from the special editions department.

CHALLENGES

“THINK like number one, act like number two” has long been a Toyota internal motto and it’s one that could come into its own in coming years.

The likes of Hyundai, Kia and Nissan would love to carve a bigger chunk out of the company’s share.

And there’s plenty to be worried about.

Ford’s Everest will have the Prado square in its crosshairs, while the Jeep Grand Cherokee that’s already used its towing might to cut into the Prado’s dominance is showing no signs of slowing.

New utes from Nissan and Mitsubishi will target more of HiLux’s dominance, while the Camry faces fresh competition from the just updated Falcon and expected Commodore facelift.

But relief could come in the form of the imminent Japanese free trade agreement, which would wipe the 5 percent import tariff from the likes of the RAV4, Prado, LandCruiser and Corolla hatch (the Corolla sedan and HiLux are sourced from Thailand, and the Kluger from the US – countries with FTAs already in force). However Toyota has shown its hand with pricing policies gained via trade pacts, choosing to load the Corolla sedan with equipment rather than pricing it sharper than its more heavily taxed hatch sibling.

Looking at the big picture, the brand is clearly concerned about its Australian position. Senior execs recently embarked on a 20,000-kilometre lap of the country to talk to customers, learn more about the sorts of cars they should be building and devise what else the brand needs to do. The global head of the company – Akio Toyoda – even made a surprise appearance to the NSW north coast for a first-hand look and listen.

Like Ford and Holden, Toyota also has the unwanted distraction of shutting down its local manufacturing operations. However, given the Camry is a global car (it’s built in eight other plants around the world) and 87 percent of Toyota’s volumes is imported, it is best positioned of the Australian car makers for life after locally produced cars; Toyota is already generally considered by the public as an importer rather than a local manufacturer, even though its export program has meant it’s long produced more cars than Ford and Holden locally.

Grade: A

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