FCAI revises VFACTS segments to better reflect “market realities” as new-vehicle prices keep rising
The ever-increasing prices of new vehicles in Australia has forced the nation’s peak industry body to increase the price caps of several market segments within its VFACTS sales statistics.
The total number of passenger car, SUV and light commercial vehicle sales segments now increases to 32 and eight of them have been altered for 2023, including two of the most popular and price-sensitive: light cars and small SUVs.
MORE: VFACTS 2022 – the winners and losers
Once a segment packed with sub-$15,000 models and more recently sub-$20,000 offerings, the light-car class is now split into two halves by a $30,000 price barrier – up from $25,000 previously.
Meantime, the small SUV segment is now defined by a $45,000 buffer – up from its previous tipping point of $40,000, which was already a lot of money for a ‘mainstream’ compact SUV.
Model ranges have long been split into their respective VFACTS segments based on their entry price as opposed to their average, median or flagship prices, hence the $30,000-plus light-car reclassification of the Skoda Fabia (which was once priced from under $20K but is now limited to a single Monte Carlo variant priced at $38,590 plus ORCs), while the latest Jeep Grand Cherokee is now listed as a (luxury) $70,000-plus large SUV.
The constant creep of new-vehicle prices has seen the budget end of the market become almost vacant in recent times, with myriad models inching clear of the once-pivotal $20,000 price barrier. So much so that there are now just two models priced from under $20K – Kia Picanto micro-car and MG3 light hatch – and none at all below $15,000.
Other vehicle classes to have had their defining price caps altered include people-movers – increased from $60,000 to $70,000 – and ‘upper large’ SUVs, the latter of which has had a relatively modest $5000 added to its ceiling (now $125,000).
A Federal Chamber of Automotive Industries spokesperson said that while only “certain segments” had been changed so far, the FCAI could not rule out other changes in future.
“VFACTS price segmentation is set by the FCAI Statistics and Economic Committee,” they said.
“VFACTS segment price points have not changed for many years, so it was necessary to make changes to best reflect market realities.”
None of these sales segment splits or indeed monthly or annual sales figures are of any relevance to consumers beyond general interest or comparing the popularity and perhaps waiting times of various models.
However, the realignment of these key segments is crucial for auto brands that must identify emerging market trends and position their models within their competitive sets.
Theoretically, a model should be moved from one side of a segment’s price cap to the other when its starting price exceeds it, whether that’s due to price increases or the deletion of cheaper variants.
Outliers in this regard include the Hyundai i20 – which remains in the sub-$30K light-car class despite the $34,990 N being the only variant offered here – and Nissan Pathfinder, which has received two price hikes since its launch in December and now starts from $71,490 following the axing of the three cheapest variants last month, yet is still classed as a sub-$70K large SUV.
Both of these models should be moved from the lower sub-set within their respective segments, but the FCAI says it’s not as simple as that.
“Moving a model ‘up’ a segment because it has reached that segment’s lowest price point does not take into account ‘cross shopping’, which occurs across segments in the marketplace,” they said.
A growing number of brands have made a habit of increasing retail prices multiple times a year in recent times as they attempt to maintain profit margins in the face of increasing raw material, production and shipping costs.
Of course this is a major issue for consumers who face rapidly increasing living costs across the board and a new-vehicle auto market that continues to struggle with supply, exacerbating delivery wait times and, in turn, further pushing up prices for both new and used cars.
[author] [author_image timthumb=’on’]https://editorial.pxcrush.net/carsales/general/editorial/profile-callum-hunter.jpg[/author_image] [author_info]Callum Hunter[/author_info] [/author]
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