Is The Golf Segment Dying?


While much has been said and many long tears cried (mostly by yours truly) over the death of the station wagon and the decline of the sedan, there appears to be another vehicle type on the brink of the abyss in South Africa: the so-called “Golf class”.

The seemingly unstoppable rise of the crossover/SUV has resulted in a number of high-profile casualties in the past decade. First, this “new” type of vehicle essentially wiped an old family favourite – stations wagons – off the map in South Africa... Only a handful estate derivatives remain available locally, and those are niche or expensive vehicles such as the crossover-oriented Subaru Outback and Volvo V60 Cross Country, or the Mercedes-Benz C-Class and Audi RS6 Avant.

Next to fall was the MPV (multi-purpose vehicle), once the darling of the car world; models such as the Renault Scenic and Opel Zafira scooped awards (and sales) around the globe. But these days, traditional MPVs are few and far between and most have also morphed into more niche/expensive offerings, such as the BMW 2 Series Active Tourer and Mercedes-Benz B-Class, or utility-vehicle based vehicles like the VW Caddy and Ford Tourneo Connect. At least, that's the case in South Africa.

And what of compact (known in the industry as C-segment) sedans, once the staple of the South African market? At the moment most of those vehicles are sold to fleets, rental agencies or Uber operators.

The rise in prominence of the crossover/SUV has evidently had a dramatic effect on buying trends and product offerings. I spent some quality time with data supplied by Lightstone recently and noticed some startling shifts.

Rise of the crossover

Crossovers such as the Ford EcoSport basically didn't exist 15 years ago, now they rule the sales charts.

In 2000, the compact SUV/crossover segment accounted for only roughly 1.7% of the total passenger vehicle market in South Africa. It’s not hard to believe, as there were very few players back then. Fast forward to 2015, however, and the situation is starkly different. Last year the compact crossover/SUV segment (only those fitting roughly in the Golf-sized segment, or competing on price), represented nearly 15.5% of the total passenger vehicle market. From less than 2% to more than 15% in 15 years…

Sales statistics show that the growth has come at the cost of the aforementioned segments, but that's not the end of it...

The bigger surprise is the shift that’s happening in the traditional C-segment hatchback market –  a development that can only partly be explained by the rise of the crossover/SUV. This is where popular vehicles such as the Volkswagen Golf, Ford Focus, Auris (previously RunX and Corolla/Conquest), Nissan Tiida, Mazda3, Opel Astra and others compete.

No love for the traditional hatchback?

The Golf and Astra are old foes, but in non-performance (GTI vs OPC) trim face a bigger battle – survival.

In the year 2000, this segment accounted for nearly 9% of the total passenger vehicle market. Of that 9%, approximately 38% of the share belonged to the Volkswagen Golf, making it a comfortable market leader, way ahead of the second-placed Opel Astra/Kadett and third-placed Renault Megane.

And what is the situation now? Last year C-segment hatches accounted for roughly 6.5% of the total passenger car market in South Africa, but bear in mind that it represent a more significant decline as it appears on the surface, seeing that in excess of 150 000 more passenger vehicles were sold locally in 2015 than in 2000...

The Golf remains the comfortable segment leader, with just over 28% of that market.

But let’s look a little deeper for a moment…

Performance and prestige

If you strip away the premium-badged C-segment vehicles (Audi A3, BMW 1 Series, Mercedes A-Class, Lexus CT200h and Volvo V40), the remainder of the competitors only account for 4.1% of the total market. And let’s not take into account the predominantly performance-oriented offerings (such as GTI/R, OPC, RenaultSport, MPS etc) as well... then the market share drops down to an astonishingly low 2.9%. Do the same exercise in 2000 and the market share was 6.5%.

It is clear, then, that the “meat-and-potato” offerings of these model ranges no longer find favour in the South African car market. Consider this: in 2015 Volkswagen sold more GTI and R-badged models, than traditional Golf derivatives in South Africa. So, even the Golf, as a mainstream hatchback, is in decline, with a segment share (without performance derivatives/premium badge offerings) of 27% as opposed to around 40% in 2000.

What do I see happening as a result of all of this?

The popular BMW 1 Series appears to perfectly encapsulate where this segment is headed.

Your move, VW and Toyota...

Before I start, just a note of caution. I do not have access to similarly detailed sales statistics of other world markets. And one must always keep in mind that South Africa is a small market and that the products sold here are not necessarily developed with our own unique demands in mind. In my view, South Africans have just been particularly accepting of the crossover genre, and the highly competitive local market perhaps previews major shifts yet to come in the world markets.

Firstly, and based on the above, the current emphasis on performance derivatives in the Golf line-up is completely understandable. As compact crossovers continue to erode the appeal of the Golf as a traditional family/do-everything car, the Golf will continue to move upmarket and more performance derivatives will be pursued. We are also likely to see further splintering (the Golf SV is an interesting and excellent offering, but given the crossover obsession of our local market, arguably not what buyers are looking for). Instead, a more compact VW crossover (below the Tiguan) makes a lot of sense. Volkswagen knows this and is working on a solution: enter the Taigun. It should do very well indeed in South Africa.

In a way, Volkswagen is in a fortunate position as it already occupies a near-premium positioning, so moving up the ladder is easier. For other brands, those stuck in the heartland of the C-segment, the chances for success appear slim.

Behind the Golf, the German premium offerings from Audi, BMW and Mercedes-Benz demand a giant share of the market, with only Ford (Focus) and Mazda (3) achieving reasonable sales. And keep in mind that Focus sales are significantly inflated by ST derivatives and that there have been major sales incentives for both those models. You have to feel for the product planners at the likes of Peugeot, Renault, and other fringe brands. They have brilliant products to offer in this segment, but seemingly a fast-shrinking pool of buyers – plus, they lack the size of the big brands' dealership networks.

I predict that more brands will follow the "Nissan approach", which is to abandon the segment altogether. We are unlikely to see successors to the Almera hatch and Tiida; Nissan now focuses on its crossover/SUVs (Juke, Qashqai and X-Trail) and is doing well. You could say Nissan anticipated the market shift better than its rivals, including Volkswagen and Toyota.

The latter (Toyota), has a lot riding on the prospects of the upcoming C-HR crossover, but seeing as it is likely to be priced relatively close to the RAV4, making it a Nissan Qashqai rival, there is a clear opportunity for a smaller (and cheaper) Juke/Renault Captur/Ford EcoSport offering. After all, as good a car as the Auris is, it not achieving the market penetration of its RunX/Conquest predecessors and, at the same time, Toyota is not yet cashing in on the crossover boom.

The upcoming C-HR will do wonders for Toyota, but what is needed is another crossover, positioned below it.


So, to answer the question posed by the headline… Is the Golf segment dying in South Africa? I’d say “no”, but that it is dying as a source of mainstream/relatively affordable do-it-all motoring. As executive sedans become increasingly expensive and unfashionable, and performance cars few and far between at this price level, the “executive performance hatchback” appears to be an apt description of the niche where this once dominating segment’s future lies. So let's just call it the GTI class from now on...

Any views or opinions expressed in this article are solely those of the author and do not represent those of or its editorial content team.

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