Buyers flock to value brands as car sales continue to plungeAustralian car buyers are turning to cheaper brands as the recession bites, with Korean makers Hyundai and Kia reporting increased sales in April, while the rest of the market slumped by almost a quarter.
April sales were down 23.9 per cent on the same month last year, with market leader Toyota suffering a dramatic 37 per cent drop in sales. But Hyundai sales are up by 12 per cent in the first four months of the year, while Kia recorded a modest sales increase in April.
Hyundai, which became synonymous with cheap motoring in the 1990s, has traditionally thrived when economic confidence is down, as buyers look to trim their expenses.
The brand enjoyed a sales boom in the wake of the 1997 Asian economic crisis and in July 1998, the Excel toppled the Holden Commodore as the country’s top-selling car.
Hyundai head of sales and marketing, Kevin McCann, says there has been a definite shift away from Japanese brands to Koreans, both with private buyers and fleets.
“In economic down times people tend to drift to value and that has coincided with us bringing out new models,” he said.
“We are seeing people trade in vehicles from the leading Japanese brands. About half our trade-ins are other brands, mostly Japanese.”
Social commentator David Chalke said the migration to value-for-money brands is to be expected in a recession.
“The first thing people do in a time like this is defer buying anything they don’t have to, but if they have to make a purchase decision, they look at relative perceived value, rather than any aspirational element,” he said.
“There’s no more ‘Oh my god it has to be European or German’,” he said.
“It’s called conspicuous de-consumption; deliberately and consciously buying down scale to tell everyone you are responding to the current economic pressure,” he said.
Toyota was suffering from being caught in the middle ground, because recessions tended to polarise buyers.
“Toyota is the classic ‘middle ground’ brand. It’s neither the cheapest, nor the sportiest or most prestigious and that’s a dangerous place to be at a time like this,” he said.
Of most concern to Toyota is the performance of its locally-built sedans, the Camry and Aurion. Sales of both cars were roughly half what they were last year, placing pressure on the company’s Altona Plant in Victoria, which is one of eight plants around the globe that produce the Camry.
http://www.drive.com.au/Editorial/ArticleDetail.aspx?ArticleID=62639&s_cid=drivers_seatI saw this on the news the other night... pretty intresting.
