Australia’s new vehicle sales rose to a record last year as offshore car manufacturers boosted production to clear supply chain backlogs, but industry experts predict a tougher 2024 as cost-of-living pressures rise.

Full battery electric vehicles made up 7.2 per cent of new vehicles delivered to buyers in calendar 2023, compared with 3.1 per cent in 2022.

The Tesla Model Y was the biggest-selling EV, and the No. 6 model of any type across petrol, diesel or electric, with 28,769 sold.

Tesla had total sales of 46,116 in 2023, outdoing the fast-growing BYD brand from China, which notched sales of 12,438. BYD is backed by Berkshire Hathaway’s billionaire investor Warren Buffett.

Utes were the top three-selling vehicles in the market. The No. 1 vehicle was the Ford Ranger ute, with 63,356 delivered, followed by the Toyota HiLux (61,111). The Isuzu Ute D-Max was in third spot, with 31,202 sales.

The Federal Chamber of Automotive Industries, which collects the sales data, said 2023 reached a record high, with 1,216,780 vehicles delivered, eclipsing the previous record of 1,189,116 in 2017. Sales were up 12.5 per cent on 2022.

Waiting times for new car buyers, which had previously been about six months for some models, have steadily declined. This bolstered sales figures for 2023, which are counted when a vehicle is physically delivered to a buyer, not when an order is placed.

Supply chain disruptions had been waning and there was now much better supplyand a substantial range of new models available in all vehicle types, said FCAI chief executive Tony Weber.

“It’s not completely resolved, [but] supply has really come on stream,” he said.

Mr Weber said the tougher economy would likely make 2024 more difficult after sharp rises in interest rates and with households feeling the pinch from inflation and higher energy bills.

“There’s going to be some pressure in all markets, including the car market,” he said. “We do recognise there will be some black clouds on the economic horizon.”

Electric vehicles on the rise

While battery electric vehicles represented 7.2 per cent of overall sales, the inclusion of plug-in hybrid and hybrid vehicles meant that vehicles with some form of electric motor made up 16.2 per cent of the total market, with 196,868 sold. This compares with 11.2 per cent in 2022.

“With some form of electrification, we’ve got to one in six vehicles in this country being sold in those categories,” Mr Weber said.

Toyota was the top-selling car brand with 17.7 per cent of the market, followed by Mazda, Ford and Kia. Tesla was the No. 8 brand.

The improvements in new vehicle supply have also flowed through to an easing in secondhand vehicle prices, which experienced a sharp jump in the depths of the pandemic.

Catarina Noro, associate economist with Moody’s Analytics, said in a report last month that there would be a sustained downward trend in used vehicle prices over the next year as an increased supply of vehicles made its way to Australia.

With prices having fallen about 9.5 per cent in 2023, she forecast a likely drop of around 9 per cent in 2024.

In December, the FCAI figures showed a 12.1 per cent increase in sales to 98,544 new vehicles, compared with the year-earlier month.

That number was crimped slightly because of the cyberhack at Eagers Automotive, the country’s largest car dealership group, which had deliveries disrupted the last week of December after outsiders accessed data from IT servers.

Eagers controls about 10 per cent of Australia’s new car market.

Extracted in full from:  https://www.afr.com/companies/transport/ev-sales-double-but-utes-reign-supreme-20231206-p5epkb

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