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Mining Boom Killing Aussie Cars?

By | Automotive, Blog, Industry | No Comments

There’s plenty of hype surrounding the Australian mining boom and its effect on the economy, however, its effects go further than what most people think. The boom in the mining industry has also triggered significant changes across other sectors, more specifically, the automotive industry.

During the month of July 2012 there has been a reported 7 per cent growth in car sales compared to July last year, much of these sales is a result of the mining boom. Growth in the mining sector has triggered an increase in demand for SUVs and Utes (utility vehicles), so much so, that models, namely the Toyota Hilux, Nissan Navara, and Ford Ranger, now hold the top 3 spots in the top 10 list of automobile model sales.

Ute sales are especially strong in mining areas like Western Australia, Queensland and the Northern Territory, which are seeing a rise in demand by more than 15 per cent, 11 per cent, and 16 per cent respectively.

On the other hand, small car models like the Toyota Corolla and Mazda 3 occupy second and third place behind Hi-Lux when it comes to sales and popularity, falling behind by just 1000 units since May.

Local Brands See Slump

Sadly, once-popular cars from local brands have seen a decrease in sales by as much as 25 per cent in July compared to last year. The Holden Commodore for instance, is seeing a 25 per cent drop in sales compared to 2011, despite outselling the company’s small car model, Cruze, for the first time since March.

Similarly, the Ford Falcon, a full-size car manufactured locally in Australia, only sold 941 units this year, down by nearly 30 per cent from 2011. After cutting more than 400 local manufacturing jobs, suppliers also announced potentially proceeding without the Falcon in the future.

More Factors in Play Aside from Mining Boom

Another contributing factor to the increased demand for SUVs and light trucks is the enactment of learner and P plate legislation across many high-population states. The effect this legislation has had on the car market and even the automobile aftermarket is significant because states, like NSW, for instance, prohibit P plate drivers to driver high-power 6-cylinder vehicles, let alone a car with a turbocharged 4-cylinder or V8 engine.

Other states in Australia have implanted similar rules, preventing many young car owners from driving vehicles normally popular with their demographic, resulting in a decrease in demand for go-fast and traditional performance bits for turbo 4s and V8s.

Many P-platers are turning to SUVs and light trucks to remain within the state engine guidelines whilst being able to enjoy the pleasure of optimising and customising their rides.

Opportunities Still Abound

Enform’s view is that so long as people continue to search for identity and individuality, the market for perosnalisation and customisation, regardless of vehicle type or platform, will only continue to grow despite shifting trends. This is the ongoing opportunity for the parts and accessories aftermarket as well as small cars like the Corolla and Mazda 3, to capitalise on the growth of larger car models.