Cruise controllers

There has never been more diversity, or better value, in the business.

And there are several very significant newcomers at the Melbourne Exhibition Centre, from exotics with pricetags of up to $1 million to the all-new Toyota challenger to the Ford Falcon and Holden Commodore.

New vehicle sales are predicted to run steady at 980,000 through 2006 after reaching a new high of 988,269 last year. It was the fourth straight year of growth, which has seen sales rise by more than 27 per cent since 2000.

The four local carmakers - Mitsubishi, Ford, Holden and Toyota - face big challenges in an industry that is more open than ever before but all believe they are set for success.

Mitsubishi introduced its all-new 380 in 2005 and increased its sales performance.

Ford has the excellent Territory, the baby Fiesta and Focus are the best small cars in the company's history and it is working on an all-new successor to the BF Falcon for 2007.

Holden, now in the run-up to its all-new VE Commodore later this year, will also have a full-size four-wheel drive for the first time. It is also pushing ahead strongly with value-priced small cars imported from Korea.

Toyota will unveil its new local hero at the motor show and has a new Camry ready for action in the second half of the year as well as such new models for 2006 as the RAV4, Yaris sedan and a new Lexus LS flagship.

GM Holden chairman Denny Mooney says: "We are all looking forward to what appears to be another great year to be in the car business.

"The market will continue to be very active with many new competitive entries launching, as well. In addition, the all-new Commodore will represent the most significant ground-up engineered vehicle we have ever done."

Holden has been runner-up to Toyota in the sales race for the past three years but its Commodore has been Australia's favourite car for a straight decade despite the massive rise in fuel prices through 2005.

Still, importers led by Mazda, Honda, Hyundai and Nissan have been huge winners in recent years with a wide range of new vehicles at competitive prices. It is a fragmentation which has made it tough to measure the business with traditional yardsticks.

Mooney says each company will have a different view on this development.

He adds: "In 2006 we're entering the year of the family car, which means new large cars, new SUVs (four-wheel-drives) and a few other surprises as well.

"The industry is responding in many different ways, which makes it exciting. Everyone is looking for that segment-buster or a twist on an old theme to gain ground."

Holden and Ford were both worried by the decline in large-car sales through 2005 but both believe that new products will bring people back to traditional Aussie sixes.

"There are many factors driving the recent decline in large car sales," says Ford Australia chairman Tom Gorman.

"Nevertheless, we believe the large-car market in Australia still represents a significant market opportunity for the future.

"Territory is the perfect example of Ford being flexible enough to respond to changing market conditions. Our ability to read the market and create an all-new vehicle to react to changing trends has proven very successful for our brand."

Toyota has done a great job with a hugely varied model line-up, but even it was forced to withdraw the Daihatsu brand from Australia in 2005 because its cars could not compete with Korean price leaders.

Now it is aiming for large-car success and another year at No. 1.

David Buttner, executive director of sales and marketing for Toyota Australia, says: "We see a market for 2006 between 980,000 and 990,000."

He puts this down to 14 years of economic growth, record-low unemployment and a lack of pressure on interest rates.

"The outlook for 2006 is one of sustained demand in those areas which have remained strong . . . there is an expectation of recovery in markets which did diminish in response to new and different vehicle offerings."

Mitsubishi says it had one of the biggest challenges of any firm in 2005 - launching the all-new Mitsubishi 380 at probably the toughest time in the last 20 years.

Mitsubishi Motors Australia managing director Rob McEniry says: "This will be another extremely busy and challenging year with many new product offerings."

He predicts all categories of car will stabilise in 2006 and that "the large-car segment will bounce back".

Returning the market to "normality" will be the year's biggest challenge, he believes.

"Fuel prices, interest rates and global political instability will all be significant contributing factors to consumer confidence," McEniry says.