Which cars to buy - or not - in 2016
Snapshot on the likely automotive winners & losers for 2016
When car companies go backwards, you’re the one who takes the hit. Everything slides, from a customer’s perspective. So let’s identify the long-term losers, and their counterparts who are winning in 2016 - so you can at least put your money on the right horse.
This report is about the Australian car industry. If you’re watching in another country, it might not be relevant. Sorry - but Australia is fundamentally what I do. Sales figures for the close of 2015, released last week, highlight the attention deficit disorder of the media.
Comparisons with 2014 are meaningless, but easy to make - because that’s how the Federal Chamber of Automotive Asshole Industries provides the figures. But what really matters is how companies go over the longer term. So let’s look at that.
Spotting the Losers
Identifying long-term losers is especially relevant if you’re in the market for a new car, for two reasons: at the car company level, those on the fast track to the sewage treatment facility are engaged in this frenzy of corporate belt-tightening - everything gets cut. If you need some support … good luck with that. They’re having closed-door meetings about cutting costs on everything from warranty claims to tech support, and the cost of carrying that spare parts inventory. You lose. We don’t have adequate legislative protection here - the level of support you get is down to the good faith of the carmaker.
It’s just as significant at dealership level. Just about every dealer is multi-franchised, and they concentrate on the brands that make the money. So, if you think there’s a Chrysler/Jeep/Dodge dealer out there who’s not wondering how to pull back, hard, it’s time for you to smoke less crack.
Instead of a Golf, buy a Mazda3 >>
The Industry: GFC to Now
So, I’m going to give the car industry the free-est of free kicks in this assessment, and we’ll see who’s improved since 2008. You remember 2008 - it was the year the GFC dropped a neutron bomb on the car industry. The lowest of low bases to improve upon.
Vehicle Sales in Australia, 2008-2015
New-car prices haven’t really changed since then, but average weekly earnings have: up almost 41 per cent in the seven years, according to Ausstats. So there’s really no excuse for going backwards - if you’re doing your job as a carmaker.
Ford & Holden: The Fat Lady's on in Five
No real surprises first up: Ford and Holden continue on their planned trajectory of self-harm.
Ford is selling 34,000 fewer vehicles today than in 2008. And many of them, like the Focus and Fiesta are just globally unreliable shitboxes - independently verified.
Consumer Reports in the United States - a hugely reputable and respected consumer advocacy organisation - rates the Fiesta as the second least reliable car in the USA for 2015, behind the appalling Fiat 500. Fiesta's unreliability - assessed independently by Consumer Reports - might as well have been off the chart.
Either that or they’re irrelevant, like the Falcon, which is down - incredibly - from 32,000 sales in 2008, to under 6000 last year. Dr Kevorkian is standing by… I mean, when was the last time you saw a new Falcon in traffic?
Ford Sales in Australia, 2008-2015
Ford Falcon Sales, 2008-2015
Holden is just as tragic: selling 27,000 fewer vehicles last year than it did just after the apocalypse. And 23,000 of those are Commodore casualties. After the factory gets fed into the fire, all that will remain of Holden are a host of bad Daewoo-built re-badged embarrassments.
Embarrassments like the South Korean-built Holden Captiva (right). A bad SUV from a worse factory, which was so on the nose when called 'GM Daewoo' that they had to re-brand it as 'GM Korea'. (Re-naming was a lot easier than getting the fundamental engineering right...) If you want to build a truly world-class SUV, start with a Holden Captiva, and then do everything the exact opposite. It's that bad...
Buy a Mazda CX-5 >> or a Hyundai Tucson >> instead.
There is no plan for Holden’s future. None. Ford and Holden are also champions of reprehensibly poor customer service. So they’re both at the absolute top of my 2016 ‘don’t buy’ recommendations. On fundamentals, it’s too great a risk.
Holden Sales in Australia, 2008-2015
Commodore Sales, 2008-2015
Fiat-Chrysler: Profound 'Don't Buy'
Fiat-Chrysler Automobiles - Chrysler, Jeep, Dodge, Fiat and Alfa-Romeo - they’ve done pretty well since 2008 - but there has been a massive decline since 2014 (down 44, 20, 24, 32 and 37 per cent respectively, by 2015). That’s a friggin’ disaster. If that’s your TV show, there’s no ‘series two’.
BEAUTIFUL TO DREAM ABOUT, BUT DO HOLD BACK...
Chrysler Sales, Australia
Jeep Sales, Australia
Dodge Sales, Australia
Fiat Sales, Australia
This points to a massive customer confidence implosion. Terrible reliability, worse customer service, and alleged multi-million-dollar senior executive management fraud - it’s like a reporter’s wet dream.
These five brands - Chrysler, Jeep, Dodge, Fiat and Alfa-Romeo - remain five of the worst possible brand choices you can make in 2016. And the profound drop in buyer confidence across them all should sound the warning bells loud and clear in your head - no matter how downright sexy some of them seem.
(Poor popularity equals poor demand - and drives the price of your trade-in or private sale down at the end of the term. Economics 101 - when the market demand drops, so does the price, if all other factors remain constant.)
See more on lemon cars in Australia >>
Alfa Romeo Sales, Australia
Volkswagen has doubled its sales since the GFC - so, well done there. But the costs have been extreme: poor quality, under-done R&D and worse customer support made the brand a ‘don’t buy’ in my book. Beautiful cars that are great to drive … before they betray you. And the 2015 emissions scandal is not over, as any current Volkswagen owner is made painfully aware at trade-in time. Volkswagen is now additionally a deadset depreciation disaster.
Audi, BMW & Merc
Up the premium end of the field, Mercedes-Benz and Audi have leapt ahead since the GFC - doubling, or more, in outright sales. BMW is up about 50 per cent. But all is not as it seems here. The growth is almost exclusively in the ‘poverty premium’ offerings - the cynical cheapies, which are typically nasty, stripped out shitboxes when you examine them on objective criteria. Audi’s reliability is at least on the up, but it’s part of the Volkswagen scandal, and Benz’s reliability is - metaphorically - afloat on an open latrine - with Consumer Reports in North America verifyling the C-Class and GL-Class in particular in the top 20 least reliable cars list, with Benz generally running 50 per cent below average in the reliability sweepstakes.
Above: South African-built C-Class (above) looks gorgeous but bites the hand that feeds it, all too often - rated 20th least reliable car in the USA. The even worse GL-Class is a big, bold, boxy Benz statement ... but is anything but at home on the range. A great choice for a spot of well-heeled getting away from it all - especially if you view returning as optional
Audi, BMW & Mercedes-Benz in Australia, 2008-2015
See how mighty Mercedes made it into my top 20 lemons list, twice >>
Merc by Model, 2015
Here in Australia we get that awesome South African-built C-Class, which underpins Mercedes-Benz sales - it’s about a quarter of all Benzes sold here. In fact, A-, B-, and C-Class Benzes and their derivatives make up about two thirds of all Mercedes-Benz sales - the luxury stuff sales are actually pretty small by volume, and also fairly flat.
In other words, without the trumped up cheapies, Mercedes-Benz would be worse than nowhere in sales - but it hurts their brand by devaluing the real luxury offerings costing northwards of $120k.
Audi and BMW are the same - drowning in cheap options. It’s almost like the big three Germans have become conventional car sellers, with an inbuilt luxury division. And that luxury arm is having its brand cachet continuously de-valued by all the plebs buying the lesser models.
It certainly will be interesting to see how that ultimately plays out. Maybe it’ll be a long-term plus, or at least a free kick, for Bentley and Jaguar.
Turning Japanese: Cue the Narcolepsy
Japanese companies like Honda, Suzuki, Mitsubishi and Nissan have demonstrated that they’ve simply been asleep at the wheel since the GFC - and Honda in particular is the Rip Van Winkle of Japanese carmakers. It’s dropped 25 per cent since the GFC, with Suzuki also significantly down and both Nissan and Mitsubishi slightly up (but not nearly enough to uncork any Bolinger any time soon).
Subaru has at least managed to maintain conservative growth - up about 15 per cent in eight years, so hardly setting the world on fire, and kinda clubbed with the ugly stick, but at least not dead from the neck up. WRX, STI, Liberty, Outback - all great cars at a great price - but need to try harder on warranty and service to keep up with emerging trends.
Honda, Suzuki, Nissan, Mitsubishi & Subaru in Australia 2008-2015
Toyota: the King ... of Mediocrity
Even Japan’s bigwig of banality, Toyota, has lost ground - still in front, but retreating. That’s hardly ever reported. Down about 33,000 sales since 2008. That’s about 14 per cent - a significant slide for the market leader.
Maybe, in the future, Toyota will have to do more than just the absolute minimum required - which, frankly, has been its forte for the past decade.
(Despite all those new sales of its light commercials to ISIS.)
Toyota Sales in Australia, 2008-2015
Toyota did the absolute minimum required on the new Toyota Hilux >>
Hyundai - the One to Watch
One brand stands out as a stellar performer since the GFC - and that’s Hyundai. Up more than 56,000 sales since Wall Street did the whole lemming/cliff thing. That’s more than double. An incredible achievement when you think about it. Because it also involved changing perceptions that centred on them selling exclusively cheap, nasty shitboxes. So they had to get the product right, and also turn people’s attitudes around - and I’m sure the attitude thing is harder. The GFC was a Hyundai free kick, in a sense. Kia’s also up 65 per cent in that time - and obviously Hyundai and Kia flipsides of the same corporate coin. (They hate that when I point that out.)
Hyundai Sales in Australia, 2008-2015
Mazda: Is What Honda Was
And Mazda - the ‘other’ strong performer on the Australian automaker landscape - the one mainstream Japanese carmaker with fire still in its belly. Mazda today is, frankly, what Honda was in the 1990s. Since the GFC, Mazda is up more than 40 per cent. It’s now Australia’s number two carmaker.
Mazda Sales in Australia, 2008-2015
Prediction: This year, Hyundai will be number three - and incredibly, they’ll get there without a ute. These three brands are pushing as hard as they can to increase their sales - successfully - by getting the product and its positioning right.
Now, I know what you are thinking - at least some of you. (Hands up, conspiracy theorists.) You're thinking: This guy is biased towards Hyundai-Kia and Mazda.
How about I let you into a little secret? I’m very biased, about almost everything, and so are you. When it comes to - I dunno - having sex, I’m heavily biased towards women. Not that there’s anything wrong with men. I’m just biased the other way. In terms of food, I’m heavily biased against McDonald’s - mainly because it’s unhealthy shit.
I'm biased about everything. And so are you.
What matters in reporting isn’t bias. Bias is everywhere. In fact, reviews are all about bias - bias towards the best products. Discrimination between good and bad. What matters is not bias, but what informs that bias. I don’t get any money from carmakers. My bias is informed by the facts, which are not in dispute, in so far as I’m aware. (Bias and corruption are completely different things.) I’m critical of both Mazda and Hyundai-Kia. Mazda needs to revise its idiotic i-Stop system and make full-sized spare tyres available in Australia. And Hyundai-Kia needs to ditch the i20 and Rio - with that antiquated 1.4 and it’s Jurassic-spec four-speed auto, which is an advertisement for 10 years ago, in case you were asleep then. And stop pretending with the Genesis (a kind of weird, South Korean take on an E-Class Benz), and introduce a ute ASAP. And replace - or comprehensively upgrade - the iLoad. And not have any more four-star safety fiascos (now thankfully fixed) like it did with the new Tucson >>
Kia Sales in Australia, 2008-2015
My bias towards these brands - they’re often in my ‘recommended’ lists - is informed by them being objectively superior to the competition. They make more objective sense. Do you want the longest warranty, and the longest service interval, and the latest technology … or do you want a Honda? Do you want the Sorento's or Santa Fe's silky smooth six-speed auto, or the appallingly unreliable CVT in the Nissan Pathfinder? These are easy choices to make, based upon facts, not opinion, and if they do not inform your bias, then please accept my apologies, but you're a dill. My bias is informed by considering the vehicles in isolation, their function, their appropriate technology, their independently reported reliability, plus the level of support you’ll get if there’s a problem, and the prospect of not having a resale value implosion at the end of the term. These are the things real buyers care about.
I’d pitch a Mazda CX-5 or a Hyundai Tucson against the competition any day. There’s no doubt in my mind the Mazda3 is the best mainstream small car available in Australia. Mazda2 - ditto, one rung down the size spectrum. Objectively true. The Hyundai Santa Fe and Kia Sorento are both insanely equipped, well built and capable seven-seat SUVs - I mean, you can’t seriously consider a Kluger or a Territory, or a Pathfinder, or a Euro contender. You can’t - at least not rationally. Not objectively. I’m biased because I want to see you make a smart choice, not a dumb one - perhaps as a result of perceptions about brands that are a decade or more out of date. Or perhaps because you've been sucked in by the megabuck marketing, or seduced by the brand cachet.