Survival of the Fittest: The competitive environment after the GFC
Darwin’s law of Natural Selection came into play in the Auto industry this year, with the GFC testing all manufacturers flight or fight responses. If a companies value proposition didn’t add up in 2009 then they were subject to the laws of nature, with only a handful posting positive sales.The down turn really showed the underlying demand for brands. Those who where not thriving in 2008 where left behind to be eaten by this new economic threat.
Top of the food chain
Internationally Subaru has had one of their best years ever, defying odds and achieving record new car sales volumes for November and December. Locally they had strong sales with their Forester and Outback models holding a 20.7% market share in the compact SUV segment. Not to mention that the Forester was named the best selling SUV across all categories.
The Impreza definitely impressed, achieving record annual sales of 12,268 and increasing market share to 5.9 in 2009. Managing Director, Nick Senior explained the reasons behind their odds defying year; “The strength of the retail network and our value-for-money proposition have been critical to this success, combined with our clear difference in the marketplace, represented by Symmetrical All-Wheel Drive and our boxer engines." “We now look forward to building on our strong foundations in 2010, with some exciting new models and initiatives.”
The awards just didn’t stop coming this year with the Golf taking out not only the drive.com.au, carsguide.com.au and Wheels magazine car of the year but also the title of ‘World Car of the Year’. Of course the Golf was VW’s best selling car with 12,141 vehicles driving out of the dealerships.
The good news didn’t stop there with VW clawing a 0.2% rise in market share, increasing their industry share to 3.2%. Their Australian progress was mirrored internationally putting them in good stead to attain their goal of becoming the world’s no.1 brand.
Mazda maintained it’s position as leading importer for 2009, with an increase in market share to 8.3% and attaining it’s second best annual sales figure. Impressive milestone’s when considering the context in which they were achieved. 2010 holds even more promise for Mazda with the new tariff cuts being enforced.
These cuts effectively level the playing field for importers vs local's by reducing the import tax payed by foreign manufacturers.
The Endangered Species List
Saab was the centre of much speculation this year, with GM divided over how to proceed with the Swedish brand that had been hemorrhaging money since 2008. The scavengers circled in early 2009 but it was Koenigsegg who looked likely to take Saab off GM’s hands. Insufficient finance and a shaky balance sheet discouraged Koenigsegg after they inspected the Swedish brand closer. It’s only recently that Spyker cars from Holland and Genii-Ecclestone financial have put in last minute bids. Their future is uncertain, but Sweden are hoping for an outcome that doesn’t include liquidation, which will cost jobs and put Volvo at risk as well. A decision looks imminent in the next few months.
Sales peaked in 2006 for Hummer, but this year their biggest fans in America where nowhere to be seen. December in 2009 only achieved 325 sales, 85% down on previous years. Hummer is set to be taken over by Sichuan Tengzhong, a Chinese based heavy machine manufacturer.
Rather ironic that the new home of the military inspired vehicle is the country posing the largest threat to its patriotic drivers.
Posting a massive drop in US sales of 80%, things are rather grim in the new car department for ISUZU. They seem to be better suited to larger vehicles, still holding the largest market share in Australian trucks and outstripping their nearest competitor’s sales by 11% in 2009.
The Competitive Landscape for 2010
One lesson that has been drawn from 2009 is that Brands have to listen to their market and evolve with their demands. If the market softens quickly and your not in pace with your consumers then, as Saab, Hummer and ISUZU have found, you can find yourself exposed to the forces of nature.
It seems that 2009 was a conduit for revealing the core value of automotive brands, exposing weaknesses and consolidating strengths. The commet has hit and the next generation of evolution has begun.
Recently at the Detroit motor show there was change in the air, with the big 3 focusing on smaller compacts and hybrids, a large step away from their traditional market.
2010 will be a year for automotive brands to build on the lessons learned in 2009…… as long as they’re still around.
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