A CHANGING AUSTRALIAN CAR PARC

Continuing from last month’s article about the changing automotive landscape, in this article we take a deeper dive into the composition of the Australian car parc and its effects on the aftermarket with the help of ACA Research and a number of our members

Looking at the top makes and models across the past 15 years (based on the vehicles registered as at the start of 2020), there are some key trends that can be called out and will impact the aftermarket.
Before we do that though, we need to recognise the position of strength that Toyota has achieved in the Australian market. Looking back at vehicles first registered in 2004, Holden is clearly number one, some 30,000 cars ahead of Toyota and Ford. Fast forward 15 years though, and Toyota has more than twice as many registrations in 2019 as Holden and Ford combined.

ACA Research reminds us that we need to remember though that this is not just about Holden and Ford.
While they were starting to decline, other brands such as Mazda, Hyundai and Kia have all moved more strongly into market, building up their presence.
Toyota has however managed to maintain its position against all comers, outperforming its closest competitor by a relatively consistent margin over the past decade.
While it is interesting to look at performance in a single year, from an aftermarket perspective it is more important to know how these numbers stack up over time.
Splitting our data out into five-year blocks lets us see how this evolves, telling us which makes are most likely to currently be turning up in aftermarket workshops, and which we can expect to see in the future.
When planning for the future, the key focus for the aftermarket (other than Toyota) should be brands that are heavily skewed to newer vehicles.

These are the ones that will either come out of warranty, or change hands in the next few years, making them more likely to move out of dealer workshops.
Given they are likely to have travelled 40 – 75,000km in that time, they will also be getting to more significant servicing milestones, which has implications when it comes to the parts required.
Brands that particularly stand out on this measure are Mazda, Hyundai and Mitsubishi (ranked second to fourth in registrations in the past five years), as well as Volkswagen and Subaru at the bottom end of the top 10.
Looking beyond this list, ACA Research notes that we should also call out Kia (46 percent of registrations in the last five years) and Isuzu with 52 percent of registrations in this period as brands that should be supported by aftermarket manufacturers, wholesalers, retailers, and workshop operators.

Applying a similar logic to vehicle models, it is again no surprise that growth is coming from SUVs, utes, or small cars.
While the Hilux is our leader regardless, the third placed Commodore and sixth placed Falcon are clearly on the way down.
Similarly, even though the Mazda 3 has over 100,000 registrations – it was down to 14,967 in 2019, dropping it out of the top 10. Given the CX-3 is performing well, and Mazda now also has the CX-30 in market, it this trend that is likely to continue to trend down going forward.
Looking at the models on the way up, the Ford Ranger and Mazda CX5 both stand out, heavily weighted to the last five years.
If we only consider the last five years, the Nissan X-Trail and VW Golf would both also jump into the top 10, with more than 90,000 registrations during that period. The industry needs to consider these shifts, understanding the consumers who own these vehicles, and their needs (now and into the future).

Ultimately, this all brings us back to the same point. The Australian car parc is changing, with some traditional makes and models in decline.
This needs to be factored into business planning, so the aftermarket can cater to tomorrow’s customer, and not just those that we are seeing today.
Also, while we do often talk in terms of servicing and maintenance, this is clearly much broader, with growth in sectors like recreational 4WD parts and accessories.
Speaking with AAAA members, it is clear that already the effects of this changing landscape is being felt and adaptions are already being made.
For South Australia’s Blackwood Dyno Tune and Service, the ‘typical vehicle’ they service has most certainly been changing over time.
“We have seen a significant increase of European and Korean vehicles at Blackwood Dyno Tune and Service, along with what has been an expected decrease in Australian brands,” Blackwood Dyno Tune and Service Manager, Michelle Monserrat, said.
“To keep ahead of these changes, our technicians are continuously updating their skills, particularly in relation to diesel engines. Training that relates to the latest diagnostic equipment and techniques has also been essential for our team, due to the variety of vehicles we see on a day to day basis. 
“The range of oil and coolants we keep on hand has also grown dramatically over the past 15 years in response to car parc changes, and we have also been sourcing parts from a larger selection of suppliers, which sometimes includes genuine. Parts availability can be very limited in some cases, so forward planning is key to meeting the expectations of our customers.
“No matter what the future holds, we believe the future success of our business will be reliant on good quality specialised training programs, the right tools and access to OE manufacturer data.” 
For Australian Clutch Services, a shift in not only applications but also technology is being experienced, with greater moves expected to come.
“There has been a slight change in our most popular kit sales with a shift from Australian built to European and Korean vehicles, however our range has also developed significantly over this time and clutch components generally wear over long periods so the full effects are yet to be seen,” ACS Managing Director, Brenton Jordan, said.
“Whilst clutch technology has continued to evolve alongside the changes to the car parc, we have seen a shift towards more advanced actuation and clutch technology as well as the shift in the associated applications.
“The changing market has also brought significant opportunities for us, particularly in our performance division where we have launched world first performance upgrades for applications such as the Hyundai i30N. We have also been working hard to offer the largest range of Dual Clutch Transmission clutch components and tools and can already see a significant shift in that direction.
“While our product development process can be influenced by a number of factors, I can say that with more European, Korean and Chinese vehicles in the market, one of the biggest changes we have experienced is the timeframe between the vehicle being available in other markets and its availability in Australia.
“Sometimes we are able to develop the product before the vehicle is available in the Australian market and other times, we are forced to wait for a test vehicle to arrive here. We have also found that there are opportunities to develop products before any other manufacturer simply by being proactive and looking for areas of the market that are not being effectively covered such as heavy duty upgrades for Chinese and Korean built vehicles.
“Every aspect of our business, from engineering and quality control through to logistics, marketing and sales have seen changes.”

Bendix is another AAAA member which has succeeded through various car parc evolutions.
“The first Bendix brake pads back in the 60s were very simple – they were an OE design on the early Holden, just a rectangular shaped pad with guide pins. We still sell them today, but the materials then were very simple compared to what you see now,” Bendix Manager of Product Engineering, Andrew French, said.
“Over the decades we have adapted and expanded to the evolving market and today we offer a lot of different products, as we develop product segments based on the market’s needs. As such, the growing diversity of the car parc has been one of our challenges over the years.
“The 4WD market for instance is quite frankly it is going nuts and with people using them for so many different things, it is not about having just one 4WD box and it has one formulation, it is about having up to seven formulations depending on the vehicle type.
“Looking ahead to the next 20 years we expect there may be more electric vehicles and hybrids, there will be increased focus on the environment, and a continuing focus on the user experience.
We also expect further evolution in product weight loss and changing materials as vehicles are getting heavier – if you take the old Holdens of the 60s they were about a tonne, and today the SUVs are around three tonne.”
For Pedders Suspension and Brakes, a long history of investing in R and D has allowed it to pivot quickly.
“We have seen a shift over the last five to ten years away from sports and performance to SUV, 4WD and light commercials and Pedders was quick to identify and adapt to these changes. As such we have been able to tailor superior products for this changing automotive aftermarket,” Pedders Suspension and Brakes Managing Director, Scott Pedder, said.
“In particular, solutions that meet the needs of carrying extra weight on a vehicle as a result of more cargo, accessories or towing requirements have been a key growth area for Pedders.
“With more than 40 new products released by Pedders every year on average, it is no surprise that our R&D team has grown considerably over the last few years and we are constantly updating our strict processes (including adherence to ISO guidelines) to ensure the quality and relevance of our products in a changing market.
“Pedders will continue to capitalise on our strong R&D capabilities, which allows us to continuously release new products to the market. We encourage feedback from the store network as they remain a key driving force behind our additions to our product range. We also continue to look at complete solutions for different driving conditions and scenarios which enable us to offer new and unique products and services to a wide range of vehicles and markets.”

If you wish to learn more about this subject, AAAA members have access to data intelligence services and support as part of their membership.

To find out more, contact advocacy@aaaa.com.au