Strong May sales come with a disclaimer
BY MATT BROGAN | 5th Jun 2024
MAY vehicle sales data released by the Federal Chamber of Automotive Industries (FCAI) this week indicates that Australia is on track to set a new first half-year (January-June) record in 2024, which contrasts with a return to discounting and end-of-financial-year deals that evaporated during the supply disruptions caused by COVID-19.
New car sales figures remain at their highest-ever point after five consecutive months of growth. The year-to-date sales tally now sits at 512,753 units, or 12.2 per cent more than the same time last year.
The figures show that the Australian new vehicle market has seemingly defied analysts’ predictions, with registrations across most sectors remaining buoyant in a cooling economy.
The Reserve Bank of Australia forecasts that GDP will continue to slow through the remainder of 2024, and that both domestic consumption and business investment will drop “dramatically across 2024-26”, indicating perhaps that the boom times may be coming to an end.
Couple this with an expected rise in unemployment and a peak in wages growth, and it is further apparent that expendable income available to new car buyers may force some to delay their outlay – or consider a cheaper model.
Although this dip in private sales will likely be made up for by pent-up demand from fleet buyers that have been at the back of the queue for stock during the past couple of years, some industry analysts believe the number of new cars sold in 2024 will fall below that of the preceding year.
Estimates place calendar year sales at between 1.05 and 1.1 million, down on the record of 1,216,780 new vehicles sold in 2023.
In 2023, SUVs accounted for approximately 59 per cent of all vehicles sold, ahead of light commercial utilities (21 per cent), and passenger models (18 per cent).
Battery electric vehicle sales hit their highest number yet at 87,217 in 2023 – a 7.2 per cent market share that has increased to 7.9 per cent YTD.
This week, GoAuto reached out to Australia’s 10 strongest selling vehicle importers (by volume) for their views on the record number of new car sales sold to the end of May.
Most respondents indicated that a change in buyer preference – both now and in the months leading up to the introduction of the New Vehicle Efficiency Standard (NVES) – will likely see a slowing of demand, particularly across once-dominant segments, while others suggested their own marques will continue to prosper despite an expected broader slowing of demand.
Hyundai Motor Company Australia chief operating officer John Kett told GoAuto that the introduction of NVES, and a further anticipated economic slowdown, will see new car sales numbers fall away in the new financial year.
“On the whole, the industry through to the end of April has seen some very solid results. But if you back out utes, and body-on-frames, the ICE share of the industry is actually going backwards,” he noted.
“Now, we hadn’t necessarily anticipated that – ICE sales going backwards – but we can see that there is a lot of competitive intensity around that space (utes and body-on-frame SUVs) among brands that don’t have a well-balanced ICE, hybrid and EV portfolio.”
Mr Kett said it was important that more diverse powertrain offerings were made available across OEM portfolios to meet the changing tastes of Australian buyers – and to remain successful in the new legislative landscape.
“We are comfortable with the (sales) results we have to date because they were planned,” he said.
“When we close out May, the success stories for us will be around Kona, i30 Sedan, and the recently launched Santa Fe. The Kona family has grown something like 100 per cent for us year-on-year, and it has given us an incredible opportunity within the HEV (hybrid electric vehicle) space.
“The i30 Sedan has been another success story for us. The Small passenger segment is usually all about hatch, but we have seen growth of around 28 per cent from i30 Sedan, and most, if not all, of that growth has come out of our i30 Sedan HEV.
“All of this has positioned us quite well, meaning that we’re probably going to exit May with our HEV sales up around 460 per cent, and we’re expecting most of that will come from Kona HEV, i30 Sedan HEV, and our all-new Santa Fe HEV.
“Then there will be a further benefit from July onwards with our Tucson HEV, and I think with those offerings we’ll certainly start to take a greater share of the HEV market.”
Mr Kett said that while HMCA remains confident of meeting its first-half targets, industry totals will likely recede over the second half of 2024 and beyond.
“The consensus suggests new car order writing is quite tough; and I think that’s representative of some of the offers we’re seeing in the marketplace, both around end-of-financial-year (including ICE models) and in some of the EV discounting we’re seeing,” he suggested.
“If the ICE business, excluding utes, demonstrates that it is in decline at the end of May or June then I think it’s quite fair to say that we’re going to be in for a very difficult second half of the year.”
When asked if the anticipated contraction of the economy would refocus buyers toward cheaper new energy vehicles, Mr Kett said he believed it would, suggesting fleet and SME buyers may bolster the market temporarily before monthly sales numbers dip.
“I think that is a fair assessment – I also believe car rental fleet and Small and Medium Enterprise buyers may look at that as an option as well, because they haven’t had access to stock for three years,” he said.
“Brands and dealers have been prioritising private buyers for logical reasons, and sometimes that may stimulate or hold the market up. But if I was thinking about what I am seeing in the business going forward then I would suggest we’ll see a trend toward lower trim models.
“I think we’ll also see a slight move in overall volume going towards fleet (buyers), and we’ll see some of the more aggressively price-positioned brands create some very competitive intensity around certain price points.”
Toyota Australia vice president of sales, marketing, and franchise operations Sean Hanley told GoAuto that the importer had enjoyed its best May on record and its best sales month since December 2020.
Echoing the sentiment put forward by Hyundai, Mr Hanley said he believes hybrid sales will continue to drive the new car market forward.
“I am pleased to report that last month was Toyota’s best May on record, and our best month since December 2020 (23,389). Our five-month total has topped 100,000 deliveries for just the second time in our history (100,398 units May YTD). The only other occasion was way back in 2008 (101,816),” he said.
“As a result, our market share is back over 20 per cent for the month and edging closer to that level for the year so far. Last month, HiLux was again our best-selling vehicle (5702). It is also Toyota’s best-selling vehicle for the five months, second only to our 2022 result (22,885).
“Leading the way is HiLux 4x4, passing 20,000 sales to the end of May for the very first time (20,004). In fact, May was the second-best HiLux 4x4 result ever – and the model’s fourth monthly 4x4 record this year (5055 units versus 5355 in June 2022).
“Hot on the heels of HiLux is the RAV4. Three months in a row above 5000 deliveries, and three consecutive monthly records (5517). The five-month total is also a RAV4 record (21,498).
“In fact, we have delivered more RAV4 SUVs in the first five months of this year than we did in any full year before 2018.
“In May, more than 95 per cent of RAV4 sales were hybrid. That’s 5245 cars. For the year-to-date, RAV4 Hybrid has reached a new high of 20,161 cars. That’s due to really strong supply, which has brought average wait times down to well under six months.”
Looking ahead, Mr Hanley suggested sales number may begin to slow in the new financial year, saying
“I don’t want to downplay the market … but I think the second half (of the year) will be very different to the first half,” he stated.
“I think we are going to have an incredible June, but I also think that what we’re seeing in the market now is a lot of retail again – there are a lot of ads, a lot of retailing, and a lot of price movement, particularly in EVs – and that all tells me that order banks are depleting, and stocks are high.
“The market is definitely altering, and I just can’t see it continuing at the momentum that we’ve seen in the first half (of the year).”
Ford Australia highlighted the success of its Ranger and Everest lines through the first quarter of 2024, drawing comparisons between the Ranger against other strong sellers in each month.
“We had the biggest January on record with total sales of 89,782 or a 5.8 per cent improvement on January 2023,” Ford Australia product communications manager Ben Nightingale told GoAuto.
“Ford placed third in January with 6624 unit sales and a 7.4 per cent share of the market. Ranger was our biggest selling nameplate, outselling the Toyota HiLux by 655 units.
“Those trends followed into February with a total industry figure of 105,023 units, making it the biggest February on record. The industry was up 21 per cent on February 2023.
“Ford placed third in February with a 6.9 per cent market share while our sales of 7275 was the best result in 13 years. Ford Ranger again outsold HiLux, this time by 950 units.
“The Ranger had its best sales month yet in February with 5353 units sold, while Everest achieved second in the MTU segment with 1059 units, making it the best Everest February result on record.”
Ford Australia enjoyed similar successes into the second half of the year’s first quarter as the industry continued to run hot, with Ranger and Everest once more leading the charge.
“March was again the biggest on record with 109,647 units sold across the industry – up 12.7 per cent against the previous year,” continued Mr Nightingale.
“Ford placed second for the month of March with an 8.0 per cent share. Ford sales of 8776 units making it the best March result in 16 years.
“Everest placed first in the MTU segment with a new monthly sales record of 2264 units and its best-ever share of 25.4 per cent. Ranger remained our best-selling nameplate in March, outselling the Toyota RAV4 by 591 units.
“For April, the total industry (sales figures) came in at 97,202 making it the best April on record. Industry is up 18.3 per cent versus April 2023 and Ford placed second with an 8.9 per cent shared.
“Combined with our March result, Ford moved to second place year-to-date, overtaking Mazda by 261 units. Ford sales of 8648 (units) is the biggest Ford April result in 19 years.
“Everest placed first in the MTU segment with a new monthly sales record of 2400 (units) while achieving its best-ever share on record of 40.1 per cent.
“Ranger is the second best-selling nameplate of April, just 288 units shy of RAV4 – however, Ranger retains the number-one year-to-date spot by a healthy 4147 units. Ranger sales of 5569 is the best Ranger April on record.”
Another top 10 importer riding high on the success of just two models is Isuzu Ute Australia (IUA).
The Japanese importer is achieving record sales from its D-Max utility and MU-X SUV duo, a feat IUA public relations manager Mark Harman attributes not only to a solid product, but also to a strong local dealer network.
“We are pleased to see that enquiry on both the D-Max and MU-X remains strong, with D-Max maintaining its third-in-segment position with close to 13,000 deliveries so far this year, and over 8500 MU-Xs finding homes in Australian driveways so far in 2024,” Mr Harman told GoAuto.
“At the same time, Isuzu Ute Australia as a brand has seen over twice the growth of the overall market, currently charting seventh out of the 50-odd brands locally, which is a testament to the strong value-for-money proposition that each of our nameplates presents in the highly competitive Large SUV and Ute segments.
“All of this would not have been possible if it was not for our dealer network, who have been working hard to deliver orders as quickly as possible.”
Mr Harman said that assuming supply remains at its present status, IUA should continue to carry its sales momentum into the second half of the year.
“Looking towards the second half of the year, we will endeavour to continue this momentum, with the MY24 updates introduced to both the D-Max and MU-X driving enquiry and orders on both nameplates.”
Mazda Australia has held its own at the pointy end of the Australian new car sales ladder for some time, and May sales were no different in that respect.
The Japanese importer says it is especially pleased with its strong-selling CX-3, a segment-topping model which has recently surpassed 140,000 local sales.
“The big one for us in May is of course the CX-3,” Mazda Australia public relations specialist Alex Fisk told GoAuto.
“It is number one in its segment and has surpassed 140,000 all-time model sales in May. It follows the milestone set by CX-30 in January of 50,000 sales.”
At the opposite end of the portfolio, Mr Fisk said that Mazda Large Product range is finding its place with Australian consumers, with new energy versions of the CX-60 range proving especially popular.
Interestingly, the higher specification CX-90 is also performing well, despite a circa-$100K price tag.
“Elsewhere in the line-up, we find the CX-60 plug-in hybrid doing well, accounting for 38 per cent of overall range sales and levelling those of the petrol-powered range,” he added.
“We also note that the CX-90 Azami makes up almost 50 per cent of the sales mix on average each month, indicating that buyers are not put off by the higher price tag.”
Mitsubishi Motors, which ranks sixth in the top 10 sales chart to the end of May says it is experiencing solid sales performance across its portfolio, with more expected from the all-new Triton as the range begins to “settle in”.
“Outlander performance continues to be strong, particularly with PHEV supply improving,” Mitsubishi Motors Australia Limited product public relations manager Adam Davis told GoAuto.
“For MY22, we were limited to around 400 units and have worked closely (with head office) to improve supply. Since about September 2023, the PHEV mix in Outlander has gone from under three per cent to over 16 per cent, and we’ve sold over 1449 year to date.
“This has also supported the continued Eclipse Cross PHEV mix, which is over 26 per cent, (while) Outlander Black Edition has contributed over 1000 sales as a new model variant, and ES two-wheel drive, LS two-wheel drive, and Exceed all-wheel drive are all very close in sales terms.
“The ASX remains popular with customers, with dealers regularly reporting that they require more stock to meet demand. Sales of the ASX were up 23.4 per cent in April, with the ES being the most popular grade.
“The Eclipse Cross has continued to supplement the ASX in the small SUV segment, up 24.2 per cent, with the two-wheel drive ES variant the most popular.
“Pajero Sport supply has also improved, with strong campaigns in market to support runout of MY23 (stock) and introduce the updated MY24 model into showrooms. Year-to-date sales are up 52.3 per cent with the GLS grade most popular.
“Finally, the Triton range is still transitioning to the all-new model. We still have MY23 cab-chassis and club-cab stock to support the all-new dual-cab.
“We should have more information soon on which models are proving the most popular but will need to let the new model settle in before establishing the most popular variant in the line-up,” he concluded.
Perhaps looking forward to the arrival of its own dual-cab utility – and performing incredibly well in YTD sales – fourth place (for the month of May) Kia Australia said general it has reached a milestone 900,000 Australian sales in May, or an average of just over 33,000 per annum since its arrival on these shores in 1997.
“The introduction of the upgraded Sorento and Carnival models, and the Sportage HEV, as well as general improvement in supply across the broader Kia range, is working in our favour – and we have just sold our 900,000th vehicle in late May,” Kia Australia media and corporate communications manager Alyson MacDonald told GoAuto.
Indeed, new energy vehicle sales look set to drive Kia sales even higher in the second half of the year, with the introduction of the medium SUV segment EV5 (which will sell alongside the Sportage range) to bolster volume for the South Korean importer.
Ms MacDonald predicts that Kia will sell around 80,000 units across the 2024 calendar year, 4000 more than in 2023.
“We will continue to diversify the local range with the introduction of the Carnival HEV and the fully electric EV5 in June, followed by the upgraded EV6 during quarter four. We expect to sell 80,000 vehicles in 2024, supported by a strong and productive relationship with the Kia Dealer Network,” added Ms MacDonald.
Top 10 entrants including MG Motor and Subaru Australia declined GoAuto’s request for comment.
Top 10 May sales by make (May 2023 versus May 2024)*:
|
Make |
May 2023 |
May 2024 |
Difference |
|
Toyota |
18,340 |
23,389 |
+5049 |
|
Mazda |
8475 |
8002 |
-473 |
|
Hyundai |
7078 |
6495 |
-583 |
|
Kia |
7000 |
7504 |
+504 |
|
Ford |
6251 |
8806 |
+2555 |
|
MG |
4828 |
4159 |
-669 |
|
Mitsubishi |
4583 |
6409 |
+1826 |
|
Tesla |
4476 |
3567 |
-909 |
|
Volkswagen |
3940 |
3362 |
-578 |
|
Subaru |
3546 |
3401 |
-145 |
*All sales data supplied courtesy of the FCAI.
