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The ongoing slump in new car sales is forcing some major car brands to rethink their sponsorship plans, with Hyundai and Holden already changing their strategies.

The Australian automotive sector has had a shocker of a first month of the new decade, with January sales falling 12.5 percent, according to data from the Federal Chamber of Automotive Industries.

The data showed 71,731 sales in January, which is the first dip below 80,000 in eight years and the lowest result for the month since the global financial crisis in 2009.

Kia’s major sponsorship of the Australia Open may have helped keep the brand prominent through January, and it was the only company to experience growth in January, posting 4,705 sales, an increase of 1.2% on January 2019.

The data paints a grim picture for the automotive sector with all major categories down on the previous year.  SUV sales were down 1.5%, passenger cars down a massive 26.9%, light commercial vehicles down 11.2% and heavy commercial vehicles down 17.6%.

Hyundai and Holden are understood to be rethinking their sponsorship spend in the A-League and AFL and a spending review by other major brands could also be on the horizon.

Toyota’s big AFL deal is up in a few years

Toyota remains the biggest selling brand in Australia with 14,809 vehicles sold, and a market share of 20.6% for January. 

Its major deal with the AFL, understood to be worth around $18 million a year and Australia’s largest, is up for renewal in 2023 and its partnership with Cricket Australia is up mid-2021. 

With the deal up in 2023, the AFL has some breathing space for the bleak market conditions to improve, and the organisation would be well advanced in planning contingencies should the marquee sponsor call time on the sponsorship.

Toyota also has a deal with the North Queensland Cowboys NRL club expiring at the end of this season, however this deal also involves a local dealership group.

Holden reviewing Pies deal

As reported in Sponsorship News this week, Holden’s major sponsorship with the Collingwood AFL club is understood to be under review. 

It has reduced the branding elements of its partnership with the Magpies over recent years and it  might also be reconsidering its branding on the club’s headquarters at Melbourne Olympic Park. 

However, Holden does generate plenty of direct sales from Collingwood members, understood to be between 250 and 300 last year alone, so might remain a lower level club partner and continue to leverage the club’s 85,000 members.

Holden just made it into top 10 brands according to the Federal Chamber of Automotive Industries January figures, having sold 2,641 vehicles and a market share of 3.7%. 

 

Hyundai out of the A-League at 15

Meanwhile, Hyundai is widely expected to finish its long-term A-League sponsorship when the deal expires mid-year.

That sponsorship is worth around $6 million a year and the relationship has been in place 15 years.

The company’s other big sport deal is its joint major sponsorship of the Carlton AFL club which expires at the end of 2022.  The company also sponsors the club’s AFLW squad.

At number three for January, Hyundai sold 5,443 vehicles and held a 7.6 market share.

 

Kia finds the sweet spot with Australian Open

Kia’s sponsorship of the Australian Open provides significant global exposure and generates local awareness in probably the least cluttered time of the Australian sports calendar.

Although it has long-term deal with Tennis Australia dating back to 2002 the company has regularly shifted its sponsorship spend to align with its strategy and ensure ongoing ROI.

In 2019 Kia downgraded its sponsorship of the Bulldogs and signed a major five-year deal with interstate rivals the Brisbane Broncos.  The car company had been the Bulldogs’ main jersey sponsor for the last three seasons and will continue to sponsor the NRL club for the next three years as a community partner.

The shift to the Broncos was primarily driven to fill a gap in Kia’s national marketing strategy.

Kia also sponsored the South Australian National Football League in 2019 and has a deal with the West Australian Football Commission to give it sports coverage in all states.

 

Mazda expands long-term sponsorship

Mazda’s sponsorship rooster includes major deals with the North Melbourne AFL club, covering both the men’s and women’s teams, which has two seasons to run, as well as significant deals with Opera Australia and the Sydney Thunder Big Bash franchise, both expiring this year. 

The company has expanded these sponsorships over the last few years with its sponsorship of the Kangaroos one of the longest standing partnerships in Australian sport, having started in 1999. 

In the number two spot, Mazda sold 6,695 cars in January and had a 9.3% market share.

How long will Ford stick with Geelong?

Ford has been a major sponsor of the Geelong AFL club since its manufacturing plant opened there in 1925. 

Ford renewed the deal for another five years after closing its Broadmeadows plant in 2016 but insiders wonder how long the company will stay committed to the club. 

Fords sits a number six in the top ten brands with 4,169 vehicles sold in January and a 5.8% market share.

Nissan owns netball

Nissan is a dominant sponsor of netball in Australia.  It became a sponsor of Netball Australia’s Suncorp sponsored Super Netball series in 2016 and has built up its rooster to include separate deals with the teams competing in the competition. 

Last year it ramped up the relationship by becoming the naming rights partner of the Queensland Netball Centre, which hosts the Queensland Firebirds and the Sunshine Coast Lightning. 

In 2019 it signed a deal with the Adelaide Thunderbirds giving it deals with all the teams competing in Super Netball. 

Nissan has a second-tier deal with the Melbourne City A-League club and a shorts and coach sponsorship with AFL’s Hawthorn, but netball is by far the company’s dominant sponsorship strategy.

VW’s golf deal geared to drive sales

Golf and AFL have been the main stays in Volkswagen’s sponsorship rooster.  The company has sponsored the Sydney Swans since 2011, extending the shorts and coach sponsorship last year for three years. 

In 2018 it made a return to the PGA of Australia’s sponsorship program after a four-year absence, replacing Holden as the naming rights partner of its flagship pro-amateur team event, the 'Scramble'.

The Scramble sponsorship was credited as helping Holden sell an estimated 450 vehicles a year according to the PGA with some 14,000 cars sold during Holden’s 25 years of sponsorship.

VW also took over from Lexus as a key partner for two other marquee PGA properties, the Australian PGA Championship and the Fiji International.

Volkswagen is also a Supercars sponsor where it promotes it AMAROK V6 light commercial vehicle.

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