TRENDY QASHQAI: Australian vehicle buyers' appetite for an SUV has seen crossovers shrink the gap to passenger-car sales. Image: Nissan
SYDNEY, Australia - Passenger cars are haemorrhaging market share in Australia as sales of sport utility vehicles shatter records and the gap between the two segments shrinks to its smallest, propelled by the popularity of compact SUVs.
Passenger cars still take up the larger share of Australia's estimated $61-billion car market, roughly R585-billion. Sales were around 40 000 of the just over 90 000 vehicles sold in May 2015, compared with 30 000 SUV sales.
RAPIDLY SHRINKING GAP
But with passenger car sales sliding 7.3% from a year earlier and SUV sales gaining 5.8%, the gap between the two shrank to its smallest, 10 years of data from the Federal Chamber of Automotive Industries shows.
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Spencer Little, industry analyst for market research firm IBISWorld said: "That gap is closing quite quickly, and we're expecting that trend to continue to be driven by the smaller, compact SUVs".
"They're more versatile - families love them. Their price is lower, they're smaller than the larger SUV models, but still roomy."
The spaciousness of small SUVs and their off-tar capabilities compared to passenger cars helped boost their sales by 28% in the first five months of 2015 from a year earlier, compared with gains of 12% and 6% for medium and large SUVs, respectively.
Best-sellers include the Hyundai ix35 and Nissan Qashqai. Between 2000 and 2015, the number of SUV models sold in Australia more than doubled to 91 from 39, while the most popular segments of passenger car models only rose to 112 from around 85, according to Richard Johns, head of Australian Automotive Intelligence.
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The rise of the SUV in Australia is not unique. Sales have surged in China, the United States and Britain in recent years as the roar of a 4x4 and its better fuel economy and handling than ordinary cars became the calling cards of the SUV.
In Australia, the soaring sales in compact SUVs are a bright spot for the car market, which shrank 2% in 2014 in a slowing Australian economy. IBISWorld forecasts the overall market would see subdued annual growth of 0.6% next five years.
What's happening in South Africa? In 2013 Wheels24 reported on the surge in small SUVs as the rising fuel price forced South African motorists to downsize to crossovers.
And in 2014 Porsche, Bentley, Lamborghini and Maserati each showcased and SUV at the Geneva auto show. The shift by traditional sports-car manufacturers to building SUVs is a big statement and outlines the global trend of the car market: top and bottom end.