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The Automotive Insights Report data for the month of April shows the market for used cars in Australia is stabilising with a steady decline in supply and demand holding firm.

“There were 183,575 used cars sold in April, representing a slight 0.3% decrease on the previous month while vehicles listed for sale reduced by 3.8%, highlighting a trend of declining listings since the end of 2023. It will be interesting to see if this trend persists given the record number of new cars being sold,” said AADA CEO James Voortman.

“The used market for hybrids and electric vehicles is booming and for the third consecutive month sales of hybrids (5.7% growth) EVs (9.5% growth) and PHEVs (2.7% growth) all outperformed the overall market.”

“There is still a significant oversupply of EVs relative to other fuel types, but the mismatch between demand and supply seems to be reducing with EV sales growing at the same time as EV listings decline,” he said.

“The average time to sell a used car has remained around the 44-day mark for the past three months, significantly down from the 12-month high of 52 days in November, indicating the market is stabilising.”

“Retained values continue to decline gradually across all segments with passenger vehicles holding up slightly better than SUVs and LCVs. Given the fact that the gap between used car supply and demand is reducing, it will be interesting to see what the effect will be on retained values and length of time to sell,” he said.

“The Ford Ranger is Australia’s undisputed favourite used car. Having topped the used car sales charts for the first three months of the year, the Ranger built on that dominance in April increasing its lead on its rivals with sales growing by an impressive 7.4%,” Mr Voortman said.

“The Hilux came in second on the sales charts, one of four Toyota models in the top ten, cementing the Japanese manufacturer’s status as the Australian market leader in both new and used car sales,” he said.

“While sales volumes underlines Australia’s love for utes, retained values show that the most in demand cars in the 2-4 year category were sports cars and smaller passenger cars while in the 4-7 year category small and large SUVs rule the roost,” said Mr Voortman.

Highlights from the AIR for April were:

• 276,719 vehicles are listed for sale, a decrease of 3.8% compared to the previous month.
• Listings were down in every state and territory, except for the ACT and South Australia which recorded minor increases.
• 183,575 used cars were sold in April, a minor decrease of 0.3% from the previous month.
• The NT and South Australia both outperformed in sales with increases over 6%. New South Wales saw the largest decline with a 4.3% reduction in sales.
• Sales of EVs grew for the third month in a row, this time by 9.5% while PHEVs grew by 2.7%.
• Hybrid sales also saw decent growth with an increase of 5.7% compared to March.
• Average time to sell a used car is 44.3 days, almost exactly the same as last month.
• Retained values continue their gradual decline with passenger vehicles holding their value best for vehicles in the 2-4 year age bracket (84.9%) while utes perform best for the older 5-7 year category (70.6%).
• The Ford Ranger remains Australia’s best-selling used car, the top 6 best selling cars remained the same in April as they were in March.

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The AADA notes the Government’s response to the Independent Review of the Franchising Code of Conduct, which has agreed, or agreed in principle, to all of Dr Schaper’s 23 recommendations.

“Overall automotive Dealers across Australia will look at this response with a degree of disappointment and we urge the Government to keep an open mind on introducing stronger automotive-specific franchising regulations,” said AADA CEO James Voortman.

“Over the past five years we have seen numerous examples of poor behaviour by multinational manufacturers ranging from GM’s termination of 200 Holden Dealers to Mercedes-Benz strongarming their Dealers into one-sided agency arrangements,” he said.

“The New Vehicle Efficiency Standard due to take effect in less than eight months will make Dealers even more vulnerable to manufacturers exiting the Australian market and leaving Dealers with stranded investments,” said Mr Voortman.

“With the changes occurring in the industry, there is no doubt that further disputes between manufacturers and Dealers will occur. It’s not a case of if, but when. Frankly, we need protections for Dealers similar to those offered in the United States,” he said.

“Automotive franchised Dealers employ tens of thousands of Australians across cities and regional areas. They make significant investments in infrastructure and contribute to their community charities and sporting clubs” he said.

“The recent case between Mercedes-Benz Dealers and Mercedes-Benz Australia/Pacific Pty Ltd highlighted the current failings of the Franchising Code with the presiding Judge stating that further consideration of the terms of the Code and possible reforms are needed, and we are disappointed that this was not picked up in the Review,” said Mr Voortman.

“While we consider that the review could have gone further to protect automotive franchisees, we welcome the extension of some protections to Truck Dealers, although we maintain that Truck Dealers should enjoy all the protections under Part 5 of the Code,” he said.

“Furthermore, we support the consideration of a licencing regime for franchisors which could allow for better dispute resolution and the assurance that service and repair work conducted by motor vehicle dealerships should be explicitly captured by the Code,” he said.

AADA will continue to engage with the Government to put forward the need for strong protections for local automotive businesses.

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The Australian Automotive Dealer Association welcomes the announcement by Minister O’Connor and Minister Bowen that the New Energy Apprenticeships Program will now be expanded to include apprentices in the automotive sector.

“This $10,000 in support will help encourage prospective apprentices to look to the automotive sector as an industry with long-term employment prospects supporting Australia’s net zero ambitions,” said AADA CEO Mr James Voortman.

“This is a critical time for the sector, with new technology coming to market it is important that Australia has a well-trained workforce to service, repair and maintain electric vehicles,” he said.

“The changes to this scheme which remove a requirement that an apprentice’s work be solely dedicated to clean energy, is a welcome recognition that along with servicing and repairing new technologies such as EVs and hybrids, automotive technicians will continue to provide services for traditional ICE vehicles well into the future,” said Mr Voortman.

The announcement notes the critical need for incentives to encourage more people into sectors that are playing a key role in transitioning Australia to a net zero economy such as is the case with electric vehicles.

EV uptake is increasing rapidly, and they are an important technology to achieve emissions reductions in the light vehicle sector.

“The shift toward EVs offers immense opportunity for the development of new skills in Australia and it is exciting to see this recognised and supported through schemes such as the New Energy Apprenticeships Program,” he said.

“The automotive sector, as with many other sectors in the economy is going through a skills shortage. It is estimated that the automotive service and repair industry is short over 40,000 workers.”

“With new policies such as the New Vehicle Efficiency Standard seeking to accelerate the uptake of EVs, particularly in the passenger vehicle space, it is more important than ever that the industry has access to incentives to encourage workers to participate and train in these clean energy technologies,” said Mr Voortman.

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Australia has posted an impressive used car sales result for the month of March despite the disruption in trade brought on by the Easter holidays.

“There were 184,054 used cars sold in March which is a very impressive result considering the number of trading days lost through weekends and public holidays,” said AADA CEO James Voortman.

“Ongoing strength in new car sales has improved the supply situation on the used car market leading to more choice and improved affordability. Consumers are in a good position to shop around and negotiate a good price for a used car,” he said.

“The used market for electric vehicles is gradually emerging with strong growth in the number of listings and cars sold. Sales of EVs grew by an impressive 13.1% while PHEVs grew by 8.9%. Customers in the market for a used EV have plenty of bargaining power as the number of listed vehicles is well above the number being sold.”

“The average time to sell a used car is now the lowest it has been for 12 months which tells us that sellers are becoming more pragmatic and buyers are taking advantage of lower prices of used cars,” said Mr Voortman.

“Amid all the talk of fuel efficiency standards in recent months, this data underscores the resilience of the ute market. Utes aged 2-4 years were the only category which did not see a reduction in retained value and the likes of the Ranger, Hilux and Triton experienced significant increases in sales from the previous month,” he said.

“While retained values continue to trend downwards, the cars which are holding their value the best are smaller used cars such as the Toyota Yaris, the Honda Jazz and the Mazda 2 which are all highly sought after by Australians.”

“The Ford Ranger remains Australia’s best-selling used car, while Australia’s love affair with Toyota is demonstrated by the fact that it makes up five of the top ten used cars sold in March,” Mr Voortman said.

AutoGrab’s COO Saxon Odgers said, “March was another strong month for Australia’s used car market. While prices of used cars eased slightly, pleasingly the average days to sell remained steady at a low point for the past 12 months at 44 days. We have seen several manufacturers recently reduce the prices of their new cars, with this flowing through to pricing in the second hand market.”

“EV sales grew at a more than 13% which is substantially higher than petrol, diesel and hybrid vehicles. EVs still make up less than 1 per cent of the used car market, with Australians continuing to prefer Ranger’s, Hilux’s and Corolla’s,” said Mr Odgers.

Highlights from the AIR for March were:

• 287,620 vehicles are listed for sale, a slight increase of 0.5% compared to the previous month.
• Western Australia led the nation with increased listings of 5.6% while the Northern Territory saw a reduction in listings of 6.7%.
• 184,054 used cars were sold in March, an increase of 2.6% from the previous month.
• New South Wales saw by far the biggest monthly increase in sales of 7.1% while sales in the Northern Territory declined by 6.2%.
• The used market for electric vehicles is slowly emerging with strong growth in the number of listings and cars sold.
• Sales of EVs grew by an impressive 13.1% while PHEVs grew by 8.9%.
• Average time to sell a used car is 44.2 days, the the lowest it has been for 12 months.
• Retained values continue their gradual decline with passenger vehicles holding their value best for vehicles in the 2-4 year age bracket (85.1%) while utes perform best for the older 5-7 year category (71.3%).
• The Ford Ranger remains Australia’s best-selling used car, followed by the Toyota Hilux.

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A new report prepared for the Australian Automotive Dealer Association by respected climate risk and energy transition experts Energetics outlines the task of rolling out electric vehicle charging infrastructure in Australia’s new car dealerships.

Energetics’ analysis found that the investment needed in charging infrastructure is estimated to exceed $1 billion for franchised new car Dealers in Australia.

“The cost of chargers and associated network upgrades is significant, but Dealers understand the importance of investing in this infrastructure and their role in educating customers on EVs,” said AADA CEO James Voortman.

“New car dealerships will be at the forefront of rolling out EV chargers as manufacturers require them to install chargers in their showrooms and service departments as part of their franchise agreements.”

“Many consumers considering taking the leap and buying a new EV are looking for their Dealer to provide education about the vehicle and the charging experience. The availability of EV chargers in dealerships means vehicles in stock can be charged and made available for test drives while buyers can also see first-hand how charging works,” said Mr Voortman.

“Evidence suggests, the majority of new EV owners will be servicing their vehicles with an authorised repairer under manufacturer warranty, so it’s important that Dealers can ensure these vehicles are able to be charged,” he said.

“This report makes an important contribution to this issue, especially in light of Energy Minister Chris Bowen’s recent announcement of $60 million in support of car Dealers installing EV chargers.”

“The work done by Energetics can be an important resource for the Government in developing the details of the $60 million car Dealer charging fund,” Mr Voortman said.

Energetics’ analysis found that:

• Investment needed in infrastructure is estimated to exceed $1 billion for franchised new car Dealers in Australia.
• With over 3,100 Dealers nationwide, the capital investment is expected to range from $130,000 for a typical regional Dealer to $580,000 for a typical rural Dealer.
• The rollout of EVs is anticipated to occur in metropolitan areas at a faster rate initially than regional and rural locations. This is mainly due to the availability of the necessary infrastructure. Customer demand is also expected to be greater in metropolitan locations.
• As rural dealerships are assumed to require the largest upgrades to electrical infrastructure, upgrade costs are higher than those for metropolitan and regional dealerships.
• Dealerships need to carefully consider the type of EV chargers installed on-site. Some locations may not need Level 3 charging capacity (e.g. metropolitan and regional dealerships), although this will often be determined by the OEM and written into Dealer Agreements.
• Dealerships may face lead times of up to two years for the installation of certain infrastructure. These include electrical infrastructure upgrades (e.g. installation/upgrading of transformers) and charging requirements (e.g. Level 3). Rural dealerships can expect longer delays.
• Dealership employees will be supporting the marketing, sale, and service of EVs.
• OEMs may have their own emissions reductions targets. They may also respond to new vehicle efficiency standards globally. Both factors can lead to expectations and requirements of their dealerships with regards to the implementation of EV charging infrastructure and the range of EVs for sale. Noting some OEMs may be able to share the financial burden of the new EV infrastructure, and Dealers should investigate any such potential.
• Australia’s new National Vehicle Emissions Standards (NVES) will likely increase the demand for plug-in hybrid electric vehicles and EVs, requiring Dealers to invest in onsite charging and infrastructure upgrades.

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The Australian Automotive Dealer Association notes the Government’s announcement today unveiling the details of the New Vehicle Efficiency Standard (NVES) and while we acknowledge the progress, we remain conscious of the challenges facing our members.

“This is not the Vehicle Emissions Standard the industry has asked for, but we recognise that the Government has listened to industry and made significant changes to its original policy and is seeking to strike a balance between the needs of competing interests,” said AADA CEO James Voortman.

“We welcome the revision of the LCV headline targets, the recategorisation of body on frame SUVs into the LCV category, and the commitment to provide $60 million to boost EV charging at Australian dealerships. We are now committed to working with the Government on a range of key issues affecting Dealers including – ensuring that the compliance for this policy is at the point of sale, not the point of importation; implementing meaningful automotive franchising reform; and addressing the enormous investment task facing Dealers in this transition,” he said.

“These are critically important issues for automotive retailers and if left unaddressed, the NVES could have dire consequences for Dealers – we welcome the Government’s commitment to work with us on these matters,” said Mr Voortman.

“Make no mistake, this is a major regulatory intervention into the automotive industry and while we understand and accept the Government’s objectives, we would also urge them to work with industry to identify any unintended consequences arising from this policy,” he said.

“As this policy is implemented over the next five years, we will need the Government to keep an open mind on these standards and to constantly review developments within the market and make sensible changes if required,” he said.

“The first review will commence in 2026 and this will be an opportunity to assess the first two years of the NVES, but also determine whether the settings are appropriate for the incredibly challenging outer years of the policy,” said Mr Voortman.

“This is a contentious issue in our industry and there is a great deal of anxiety among Dealers. We urge the Government to consider the needs of these businesses which employ more than 60,000 people, invest in cities and towns across the nation and which provide so much support and sponsorship to their communities,” he said.

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The Australian Automotive Dealer Association (AADA) is pleased to announce the 2024 AADA Convention & Expo details. This important industry event will be hosted at the Melbourne Convention & Exhibition Centre (MCEC), located in the heart of Melbourne, on July 24-25, 2024.

The 2024 Convention & Expo theme, ‘Driving Forward Together’, will spotlight the emerging challenges and opportunities within the dynamic online commercial landscape and the regulatory challenges around vehicle emissions. The AADA program will also focus on the impending transformative shifts in the franchised new car dealership sector and their pivotal role in car distribution. The 2024 AADA Convention & Expo program promises to tackle these evolving dynamics and provide our attendees with thought-provoking discussions and practical solutions to navigate this changing terrain.

“We are really looking forward to the AADA Convention & Expo returning to Melbourne for the first time since the pandemic. Our industry is facing many challenges, so we will be developing a program which assists Dealers to do what they do best, which is turning challenges into opportunities,” said James Voortman, AADA CEO.

“Marking this industry event in your calendar is crucial. The 2024 AADA Convention & Expo is brimming with potential. We are optimistic that this event will act as a significant platform for industry leaders and stakeholders to assemble, engage in meaningful discussions, and collectively navigate the future trajectory of our industry,” said Patrick Tessier OAM, Convention Director.

For more updates on the 2024 AADA Convention & Expo, we invite you to visit our website: https://aadaconvention.com.au/.

ENDS.

For further information please contact:

Patrick Tessier OAM
Convention Director
E: patrick@aadaconvention.com.au
M: +61 412 685 857

 

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February used car sales figures have been released today in the Automotive Insights Report (AIR). The figures released by AADA and AutoGrab show that the number of used vehicles listed for sale has increased but the number of used cars sold have dropped.

“Overall, the used car market seems to be presenting opportunities for consumers interested in buying a used car,” said AADA CEO James Voortman.

“A strong start to 2024 new car deliveries is flowing down into the used car market, with a slight rise of 1.3 per cent in the number of vehicles listed for sale in the month,” he said.

“While listings increased, sales of used cars dropped by 1.2 per cent from the previous month,” said Mr Voortman.

“Amid all the discussion on fuel efficiency standards, the number of EVs listed for sale is almost four times the number which sold in February, indicating a mismatch between demand and supply of used EVs. Petrol and diesel cars accounted for 95 per cent of used cars sold, with hybrid sales increasing by 4.6 per cent this month,” he said.

“The top 10 selling makes and models list also closely reflects preferences from the new car market, with the Ford Ranger and Toyota Hilux the top selling vehicles for the month,” he said.

“Although February saw a drop in average retained values, for vehicles aged 2-4 years, there are some cars that continue to secure good retained values for consumers with 18 of the top 20 models listed reclaiming their positions from January,” said Mr Voortman.

AutoGrab’s Chief Commercial Officer Saxon Odgers said, “This month’s findings reflect the current strength in the automotive industry, showcasing yet another strong month for car sales across the board.”

“One notable statistic is the average days to sell, which has reached its lowest point since March of last year. This shows a swift turnaround in the market, reflecting growing consumer demand and efficient inventory management strategies,” said Mr Odgers.

The Automotive Insights Report shows that in February:

• Across Australia 286,329 vehicles were listed for sale and in that period 179,448 were sold.
• The data shows that the overwhelming majority of used cars being bought and sold have petrol or diesel engines, occupying a 95 per cent market share.
• The time it takes to sell a used car has gradually come down to 44 days in February after peaking in November at 52 days.
• On average, retained values saw a month on month decrease.
• Some popular used car models aged 2-4 years old continue to report a strong return for consumers in terms of their retained values with 18 of the top 20 models listed making a repeat appearance from January.
• The top 10 selling cars in the used market remained very similar to the previous month with 9 of the top 10 makes and models retaining their spot in the list. It closely reflects preferences in the new car market, with the Ford Ranger taking out top spot ahead of the Toyota Hilux.

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The Australian Automotive Dealer Association is calling on the Government to renovate its New Vehicle Efficiency Standard proposal or risk higher vehicle prices and lack of consumer choice.

The AADA Submission has highlighted the limitations of the current proposal and suggested changes to the policy.

“Dealers are 100 per cent supportive of a fuel efficiency standard in Australia, but the policy in its current form will do more harm than good,” said AADA CEO James Voortman.

“This policy goes too far too fast and it’s almost certain Australians will pay more for new cars and lose access to their beloved Utes and SUVs,” he said.

“Less than one in three of the more than 2,000 vehicle variants for sale in Australia today would meet the initial target proposed to start in less than 10 months-time. The cars most likely to experience a price hike or be removed from the Australian market are the Utes and SUVs that Australian families and businesses love.”

“This policy comes close to a de facto ban on petrol and diesel vehicles. While EVs are the future, the majority of customers are still concerned over the cost of the vehicles, the lack of charging infrastructure and the dearth of affordable EV Utes and large SUVs,” said Mr Voortman.

“No other industry has been asked to reduce its emissions by 60 per cent in only five years. I can see car brands unable to comply with this policy departing Australia, leaving their customers and Dealers high and dry. We have seen this before with the likes of Holden and other brands,” he said.

“The worst thing we can do for vehicle emissions is to discourage new car sales. The age of our vehicle fleet has been growing over a number of years and there is a major risk that consumers simply hold onto their older cars for longer at the expense of the environment,” Mr Voortman said.

We urge the Government to consider the recommendations we have put forward, including,

• Adding SUVs and four-wheel drives to the Light Commercial Vehicle Category,
• Allowing the expanded Light Commercial Vehicle category seven years to meet their target,
• Reducing the proposed penalties in the early years of the scheme, and
• Developing a series of incentives to stimulate consumer demand for low emissions vehicles.

Australia’s more than 3,100 new car Dealers employ some 61,000 people, invest significantly in local towns and cities with a total economic contribution of $18.6 billion to the national economy.

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New research about car buying intentions underscores the challenges of the Government’s plan to reduce Australia’s light vehicle emissions by 60% in five years.

‘EV & Hybrid Vehicle Wave 2 Insights Report’ released by the Australian Automotive Dealer Association shows that electric vehicle sentiment is shifting at a trickle rather than a flood, while most consumers plan for their next vehicle to be a SUV or Ute.

The research is a second wave of tracking EV sentiments across the community following a similar study conducted in December 2022, collecting feedback from a sample of 2,000 Australian drivers (representative by age, gender and household location across Australia).

“The proportion of the market open to buying an EV has grown but represents only one in four buyers, as the strongest barrier to considering an EV remains the higher purchase price,” said AADA CEO Mr James Voortman.

“Most buyers are looking at a non-electric SUV or a Ute as their next vehicle. This is no surprise because these are the vehicles Australians love, but are also the cars most at risk of an overly aggressive vehicle emissions standard,” said Mr Voortman.

“It is also clear that consumers are less likely to buy a new one due to the current cost of living crisis. The last thing we need to do at this time is to further discourage consumers from buying new cars which are safer, cleaner and greener than the old cars they replace,” he said.

“We urge the Government to study this survey and adopt an emissions policy which reduces vehicle emissions in a way that protects affordability, choice and the local automotive industry,” said Mr Voortman.

Among the survey findings are:

• Two thirds tell us they’re going to keep their current vehicle for longer than initially planned due to cost of living pressures.
• Three in five say that they’re less open to paying more for EVs due to cost of living pressures.
• Respondents open to buying an EV for their main vehicle has grown from 21% in 2022 to 25% in 2024.
• Consumers are more likely to be intending on replacing their main vehicle in the next 3 years (61%, up from 53%).
• The price premium consumers are willing to pay for an EV over a traditional fuel type is 8% up from 6%.
• More than two-thirds believe governments should be incentivising more customers to transition to EVs.
• 57% are not open to an EV due to perception that EVs cost too much, but this is down from 62%.
• 62% of respondents say their next purchase will be a SUV or a Ute.

“This research confirms what we already knew, Australians continue to preference SUVs when considering their next vehicle purchase, are very conscious of price given current cost of living pressures, and intention to consider an EV on the next main vehicle driven is lowest when replacing large SUVs and utes,” said Mr Voortman.

The AADA represents 670 new car Dealers in Australia that operate over 3,000 dealerships that directly employ over 56,000 people.

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