Abstract
Research Overview
Rising Vehicle Ownership Makes the Australian Automotive Vehicle Market a Key Part of the Countrys Manufacturing Sector
With a vehicle ownership rate of 675 per 1000 individuals (third highest in the world) and one of the oldest vehicle parcs in the world (average vehicle age = 10.3 years), the automotive vehicle market has evolved as a key participant in the Australian manufacturing sector. With per annum sales of $27.00 billion, this market is a vital source of employment, research and development, and also an important customer for the steel, rubber, and plastics industries. Automakers primarily produce large passenger motor vehicles (PMV) and variants, light commercial vehicles, and the sports utility variety whereas small, light, medium cars and medium and heavy commercial vehicles constitute the imports. The automotive vehicle market has emerged as the sixth largest exporter in the nation registering impressive export figures by successfully catering to the overseas customers.
Growing Disposable Income Encourages Launch of New Models
The growing economy (gross domestic product growth for 2005 is likely to be at 3.0 percent), consumer confidence, and rising export of raw materials/agricultural products along with the countrys emphasis on reforms, low inflation, is reflecting in an increased disposable income with the people. This is likely to drive the demand for capital goods such as vehicles and automakers have quickly responded to this by introducing new models, thus offering a wider choice to the end users. With the consumers encouraged to opt for replacements and new purchases, banks and financial companies have launched easy vehicle finance schemes with minimum formalities.
During the period 2002-2004 the Australian automotive vehicle markets have seen an excellent rise of 23.6 percent in the sales of new vehicles. "The market has achieved a substantial improvement in its international trading activities in both the automotive vehicle as well as the component sectors, and the overall growth is likely to continue in 2005," says the analyst of this research service. "Annual exports in the automotive vehicle markets reached $5.00 billion in 2004, and the participants in the Australian market chiefly cater to the Middle East countries, United States, New Zealand, and South Korea."
Sports Utility Vehicles Witness Increased Demand
Over the period 2004 to 2011, the automotive vehicle markets are expected to grow at a compound annual growth rate (CAGR) of 4.0 percent from 955,229 units to 1,253,515 units. The sports utility vehicle (SUV) segment is expected to emerge as the largest contributor to this, demonstrating a CAGR (2004-11) of 8.3 percent. With the Australian consumers associating safety, style, better seating capacity, competitive pricing, and wider choice with SUVs, they have emerged as the preferred family cars.
Overall, with improving economic and business conditions, the commercial vehicle segment is also experiencing growth. "During the forecast period the passenger car segment is likely to see an increase in the sales, especially in the fuel-efficient small cars segment," notes the analyst. "With the Australian automotive market witnessing intense competition, companies need to overcome challenges arising out of lowering of tariffs, entering into free trade agreement (FTA) with the United States and the likelihood of signing a FTA with China."
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