Car parts makers worried as local vehicle sales sag

The fall in the number of locally made cars sold in Australia is likely to make things difficult for component manufacturers, according to the Federation of Automotive Products Manufacturers.

The 2011 automotive sales figures released yesterday by the Federal Chamber of Automotive Industries showed that although Toyota and Holden held onto their number one and two spots respectively, local sales of Australian produced cars fell 3% to 141,939.

Sales of Ford Australia’s flagship local model, the Falcon, crashed 36.5% to 18,741. Overall, Ford sold 20% fewer locally made cars in 2011.

Toyota, which experienced component supply shortages early in the year due to the Japanese tsunami, saw its locally made car sales fall 23.6%.

Federation of Automotive Products Manufacturers chief executive Richard Reilly says the drop in Australian cars sold would have an impact for some of the members of the component-makers body, as the vast majority of component-makers sell to Australian car manufacturers.

“It’s a difficult time for the industry,” he says.

“It’s competitive, there’s a high level of imports, and there’s a consumer preference for smaller vehicles.”

“The industry is in relatively difficult times – we have to continue to put out a first-class product.”

Reilly says some component-makers were looking to integrate themselves into global supply chains in a bid to safe-guard against a reduction in Australian-made cars.

“Certainly a number have been successful at that. We sell to Europe, as well as Asia,” he says.

But Reilly says that the continued growth of car sales overall was a bright spot.

“Good news is that sales are still strong. That’s inherently good for the Australian cars industry.”

Total vehicle sales in Australia in 2011 – including locally made and imported cars, vans, trucks and buses – were down 2.6% to 1,008,437.

But while there were big drops in sales of locally made leaders such as the Ford Falcon, the Holden Commodore and the Toyota Camry, newer models helped stem some of the losses.

The locally-produced Holden Cruze sold 33,784 units, making it the fifth best-selling car model in 2011.

While sales of Ford’s Falcon slumped, its revamped Territory SUV wagon was up 20%, making it the highest-selling medium-sized SUV.

Federal Chamber of Automotive Industries chief executive Ian Chalmers was happy with the overall number of cars sold, even though fewer came from Australian manufacturers.

“2011 full year sales are an exceptional result given the effects of natural disasters both at home and abroad throughout the year,” he says.

“The uptake of new vehicles was impacted early in the year by economic uncertainty, closely followed by natural disasters in the key markets of Western Australia, Victoria and Queensland.”

The figure comes as Federal Industries Minister Kim Carr travels to Detroit to meet American automotive manufacturers in a bid to bring some lessons back home.

Reilly says he didn’t think the Australian car industry was necessarily going to disappear.

“The three vehicle manufacturers in Australia have done an awful lot of work in making Australian vehicles more economically efficient, in terms of fuel and CO2 emissions,” he says.

“The Cruze figure are pretty impressive, as well as the Ford territory, the Toyota Hybrid and the Camry.”

“There are some great vehicles made in Australia. I don’t necessarily see that ending.”