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The Australian Automotive Dealer Association notes the release of the Government’s next consultation on a light vehicle fuel efficiency standard.

This impact statement is very technical and considers a number of options, but the Government has stated that it has a preferred option of reducing the emissions by more than 60 per cent for passenger vehicles and light commercial vehicles in just five years.

“On the surface this is an incredibly ambitious target which will be difficult to achieve especially for utes and large SUVs,” said AADA CEO James Voortman.

“This could have consequences for affordability and vehicle choice,” he said.

“Other countries have reduced new vehicle emissions over a much longer time frame, with credits built into their standards. They have also offered generous incentives universally available for consumers to buy low emissions vehicles – the Government’s preferred option could not be more different,” said Mr Voortman.

“We are concerned that this policy goes too far too fast and that consumers will be the big losers, as will the local automotive businesses,” he said.

“We will study this impact statement to understand the findings and consult with our members, Australia’s more than 3,000 new car Dealers.”

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The Australian Automotive Dealer Association and AutoGrab are pleased to release the first annual Automotive Insights Report (AIR) – Year That Was for 2023. The data shows that 2,074,535 used cars were sold in Australia in 2023, with strong used car supply aligning with the record year for new vehicle sales.

“This data demonstrates the significance of the used car market in Australia with more than two million used cars sold in 2023. For every new car sold 1.7 used cars were sold, confirming that most Australians are deciding to purchase used cars,” said AADA CEO Mr James Voortman.

“The combined new and used car market saw almost 3.3 million cars sold in 2023 and it is important for industry participants, regulators and policymakers to look at the entire market when making decisions” he said.

“The demand for used cars remained robust in 2023, attributed to our growing population and cost of living pressures reducing buying power,” said AutoGrab Chief Commercial Officer Saxon Odgers.

“The good news for those looking to purchase a used car is that we’ve seen a clear downward price trajectory since March 2023 following a surge of new vehicle supply, with this pattern anticipated to persist through the first half of 2024. This represents a win for consumers who now have a choice when looking to buy their next car as new cars are available for delivery and used cars are more accessible,” said Mr Odgers.

“Congratulations to Toyota for being the top selling used car brand in 2023 and to the Ford Ranger for narrowly beating off the Toyota Hilux to claim the mantle of Australia’s top selling used car for the year,” said Mr Voortman.

“When diving into retained values of vehicles, a topic that interests many consumers and Dealers, we can see that across all age groups, utes and light commercial vehicles held their values above the average. Passenger vehicles across all age groups tracked close to the average, while SUVs were the worst performing vehicle segments in terms of retained value, sitting well below average for all age groups,” he said.

The Automotive Insights Report shows that for 2023:

• Across Australia 2,013,465 vehicles were listed for sale in 2023 and in that period 2,074,535 were sold.
• Exceptional demand for used cars, with 34.4 per cent growth since January, hitting its peak in November 2023.
• Petrol and Diesel Vehicles accounted for more than 96% of used car sales, with Hybrids, (2.7%), EVs (0.7%) and PHEVs (0.1%) growing off a low base.
• Toyota was the top selling used car brand with 16.6% market share, followed by Mazda (8.2%) and Ford (8%).
• The Ford Ranger was the top selling vehicle with 65,938 units, pipping the Toyota Hilux (65,852) by only 86 units.
• Used car prices declined 1 to 1.5% monthly, which was accompanied by a rise in days to sell.
• The used EV market saw an almost doubling in supply and sales. However, EVs represent only 0.7% of market share; have below average retained value; and take longer to sell than petrol and diesel cars.

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The December edition of the Automotive Insights Report (AIR) has been released today.

AIR shows that used car trading softened in December compared to the previous month, most likely due to seasonal factors. The average time it takes to sell a used car is increasing over time, while the retained values of used cars is edging down.

“In December used car sales and cars listed for sale contracted from the previous month as Australians fell into the Christmas and New Year holiday period,” said AADA CEO Mr James Voortman.

“Petrol and diesel cars dominate the used car market making up around 95 percent of cars sold and cars for sale. The market for used electric vehicles is immature but is expected to grow as new EV sales make their way onto the used market,” said Mr Voortman.

“Despite a reduction in days to sell from the previous month, we are still seeing a trend of used vehicles taking longer to sell with December being the second month in a row that average days to sell is over 50,” he said.

“The retained value of cars continues to reduce, indicating an improving supply situation which should bode well for consumers,” he said.

The Automotive Insights Report shows that in December:

• Across Australia 276,268 vehicles were listed for sale and in that period 169,312 were sold.
• The data shows that the overwhelming majority of used cars being bought and sold have petrol or diesel engines.
• The used market for electric vehicles remains very immature with battery electric vehicles making up 0.7% of total cars sold and plug-in hybrid vehicles making up less than 0.2%.
• The average time to sell a used car is 50.9 days which is a slight reduction from the previous month, but the trend shows days to sell increasing.
• Retained values continue to decline after the record highs of recent years.
• Some popular used cars are worth more on average today than when they were sold new – examples include the Suzuki Jimny, Toyota Yaris/Yaris Cross, Toyota Landcruiser, Toyota Rav4 and Honda Jazz for vehicles aged between two and four years.
• The list of top selling cars in the used market closely reflects preferences in the new car market, with the Ford Ranger taking out top spot ahead of the Toyota Hilux.

The 2023 Annual Report rounding up the full calendar year of used car sales will be released to the public in the coming weeks.

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The peak body representing franchised new car Dealers is disappointed by the changes made to the Luxury Car Tax in today’s MYEFO.

From the 2025-26 Financial Year, the definition of a fuel-efficient vehicle under the Luxury Car Tax will be halved from a maximum consumption of 7L per 100km, to just 3.5L per 100km.

“These changes to the Luxury Car Tax (LCT) have made a bad tax even worse,” said AADA CEO Mr James Voortman.

“The LCT is an outdated tax meant for a time when Australia still manufactured cars – it should have been abolished years ago, but now it’s being used to further tax fuel efficient cars,” he said.

“The Australian Government should be encouraging the uptake of fuel-efficient vehicles not increasing the tax on them,” said Mr Voortman.

“The best way the Government can use the LCT to achieve a 43 per cent reduction in greenhouse gas emissions by 2030 is by abolishing the tax altogether.”

“This change will see the Government claw back an additional almost $100 million a year from taxpayers by 2026-27. It is inflationary and will dissuade consumers from buying vehicles with the best safety and fuel-efficient technology,” he said.

“So many independent reviews and inquiries have called for the LCT to be abolished, but instead it continues to raise over a billion dollars a year at the expense of motorists and local industry,” he said.

“For years the automotive industry and motorists have been calling for a root and branch review of the automotive taxation regime, but instead we see damaging tinkering and absolutely no consultation with industry,” said Mr Voortman.

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The Australian Automotive Dealer Association (AADA) welcomes the High Courts’ decision today to uphold the appeal in Mitsubishi Motors Australia Ltd & Anor v. Begovic.

“This decision is excellent news for Australia’s more than 3,000 franchised new car Dealers and will bring certainty to the process of selling new cars in Australia,” said AADA CEO Mr James Voortman.

“Federal regulations require all new vehicles to be affixed with a fuel consumption label listing the results from a government-specified laboratory test. The High Court has found that by complying with the letter of the law Dealers and manufacturers are not in breach of Australian Consumer Law,” he said.

“This is a victory for common sense which will allow Australian Dealers and manufacturers to continue to service the needs of their customers without fear of inadvertently breaching the law,” said Mr Voortman.

The AADA would like to thank Mitsubishi Motors Australia for their collaboration and leadership on this issue which had industry wide implications for all franchised new car Dealers and manufacturers.

For a copy of the judgement summary, click here.

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The first edition of the Automotive Insights Report (AIR) is live today. AIR is a joint initiative from the Australian Automotive Dealer Association (AADA) and AutoGrab which will provide data on Australia’s used car market every month.

“Prior to the release of AIR there has been no reliable and regular dataset for the used car market, even though more than 65 per cent of all cars purchased in Australia are used cars,” said AADA CEO Mr James Voortman.

“AADA has partnered with the used car market data specialists, AutoGrab, to provide regular market data which will serve as a valuable resource for Dealers, consumers, and enthusiasts interested in the used car market,” he said.

“The first edition of AIR shows that after a number of years of tight supply, Australia’s used car market is seeing increased levels of stock with increases in the time it takes to sell a car and a gradual decline in retained values,” said James.

“AutoGrab is thrilled to partner with the AADA to bring greater transparency to the used car market. For the first time, consumers can navigate the market with confidence, armed with valuable insights into vehicle values and market trends, said Daniel Werzberger, Founder and CEO of AutoGrab.

“In an increasingly challenging landscape for car dealerships, with average days to sell on the rise and retained values experiencing a downward trend across the board, our priority is to revolutionise the way people navigate the used car landscape. This report marks a significant step forward in our mission to make car buying a transparent, informed, and value-driven experience for all,” he said.

The inaugural report shows that in November:

• Across Australia 303,732 vehicles were listed for sale and in that period 206,417 were sold.
• The data also shows that the overwhelming majority of used cars being bought and sold have petrol or diesel engines.
• The used market for battery electric vehicles remains very immature with these vehicles making up only 1.25% of total vehicles for sale and only 0.6% of total cars sold for the month.
• The average time to sell a used car is 52 days which is the highest it has been over the past 12 months.
• Retained values are gradually declining after the record highs of recent years, but there are still several makes and models which are holding their value very well and, in some instances, exceeding their new market value.
• The list of top selling cars in the used market closely reflects preferences in the new car market, with the Ford Ranger taking out top spot ahead of the Toyota Hilux.

These statistics will now be released each month, with next month’s release offering full calendar year data for the used car market.

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The Australian Automotive Dealer Association (AADA) is encouraging consumers to take advantage of the ready supply of Battery Electric Vehicles (BEV) available in showrooms.

Dealerships across Australia have indicated that wait times for buyers hoping to get their hands on an EV have been slashed in recent months. Many variants are available and in stock now, and for some brands there is as little as a one month wait time for new orders placed today.

“There is no shortage of EVs available for purchase here in Australia. In many instances customers can walk into a dealership and drive out in a new EV in a matter of days,” said AADA CEO Mr James Voortman.

“In particular, EVs at the more affordable end of the spectrum have strong levels of supply which is good news for customers looking to make the transition to a BEV,” he said.

“It’s really important that we stop talking down the supply of EVs in Australia because they are available for customers to purchase and take delivery soon. We have canvassed Dealers across the country and checked delivery timeframes for online distributors. The supply situation for EVs is very healthy,” Mr Voortman said.

“We know there have been reports in the media recently of long wait times for customers who are looking to purchase a BEV, however, customers can be rest assured that there is plenty of stock and while there are some variants that continue to have extended wait times, supply issues are being resolved quickly, allowing customers to get into their new EV sooner,” he said.

“Customers should take note of the various state government EV purchase incentives, including in NSW where buyers can access EV stamp duty exemptions and rebates for contracts to purchase completed before 1 January 2024,” he said.

“Supply of some popular ICE and hybrid vehicles remains an issue, but the situation is improving,” said Mr Voortman.

Dealers are continuing to work with their manufacturers to deliver vehicles to customers as soon as possible and the AADA encourages any customers looking to purchase an EV to reach out to their local franchised new car Dealers.

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The Australian Automotive Dealer Association welcomes the appointment of Dr Michael Schaper by the Minister for Small Business, Housing, and Homelessness, the Hon Julie Collins MP, as the independent reviewer of the Franchising Code of Conduct.

As a former Deputy Chair of the Australian Competition and Consumer Commission and former ACT Small Business Commissioner, Dr Schaper brings the necessary expertise and experience to this critical review of Franchising Regulations and the Code of Conduct.

This Franchising Review is a timely and welcome step to examine the regulatory settings in place to support Australia’s franchising sector, including by evaluating the effectiveness of previous reforms such as the New Car Dealerships provisions enacted in 2021.

AADA CEO Mr James Voortman said, “This review will be a significant step in ensuring a fair and transparent business environment for new car and truck Dealers across the nation and the AADA welcomes the government’s commitment to continually improve this vital regulatory framework.”

“In recent years there have been several high-profile automotive franchising disputes, a number of which remain before the courts. Now is an opportune time to review franchising regulations to ensure that that they remain fit for purpose and the Code is effectively protecting new car dealers and their customers,” said Mr Voortman.

“Franchised new car Dealers invest significant sums of capital, employ tens of thousands of Australians, and make significant contributions to their communities. It is important to ensure that elements of our franchising laws, such as termination processes, dispute resolution and contract terms, are fair and reasonable,” he said.

“Additionally, this review provides an opportunity to expand the provisions to encompass truck and other automotive franchised Dealers who are currently not afforded the automotive specific protections the Franchising Code provides,” he said.

The AADA looks forward to working closely with Dr Schaper throughout the review process.

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Franchised new car Dealers welcome the announcement by the Minister for Small Business, Housing, and Homelessness, the Hon Julie Collins MP, that a review into the Franchising Code of Conduct is due to commence in the second half of 2023. The review marks a significant step forward in ensuring a fair and transparent business environment for new car and truck Dealers across the nation.

“The decision to conduct a comprehensive review demonstrates the government’s commitment to continually improve this vital regulatory framework. It presents an opportunity to address any existing gaps or limitations in the current Code, ensuring it remains relevant and effective in the rapidly evolving automotive industry,” said AADA CEO James Voortman.

“The relationship between franchised new car and truck Dealers and their manufacturers has traditionally been characterised by strong partnerships and collaboration. However, in recent years there have been several high-profile automotive franchising disputes, a number of which remain before the courts. As the industry undergoes a period of rapid change including the emergence of many new automotive franchisors, it is critical that our franchising regulations are fit for purpose,” he said.

“The review of the Franchising Code presents an opportune moment to address these evolving dynamics and ensure that the Code effectively safeguards the interests of Dealers and their customers now and into the future,” said Mr Voortman.

“Additionally, the review provides an opportunity to expand the provisions to encompass truck and other automotive franchised Dealers who are currently not afforded the automotive specific protections the Franchising Code provides,” he said.

The AADA extends its full support to the government in undertaking this review process and looks forward to contributing to the consultation process on behalf of members when it begins.

 

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The peak body representing franchised new car Dealers welcomes the Government’s commitment to develop fuel efficiency standards for light vehicles.

The AADA is pleased to see the release of the Government’s National Electric Vehicle Strategy and will participate constructively in consultations on the key element of the strategy, the design of an Australian fuel efficiency standard.

“We believe the transition to cleaner and greener passenger cars can provide major benefits for consumers and businesses in the automotive supply chain. An appropriately structured fuel efficiency standard is an important element of this journey,” said AADA CEO James Voortman.

“The automotive industry is in fierce agreement that we need such a standard, but the detail that emerges out of the consultation will be critical. If we go too hard too fast we risk undermining vehicle affordability and choice.”

“We need a policy tailored for Australia’s unique circumstances as a small, right-hand drive vehicle, full import market,” Mr Voortman said.

“The standard also needs to be considered alongside other EV policy initiatives. In the US for example, fuel efficiency standards exist alongside incredibly generous purchase incentives. The full suite of policies needs to inform our ambition in this massive transition,” he said.

“The AADA are keen to work with the Federal Government and other participants in the automotive supply chain to ensure the fuel efficiency standard is ambitious, but achievable, allowing Australians to access state of the art fuel-efficient vehicles, without reducing vehicle affordability or choice,” said Mr Voortman.

We congratulate the Government on the other initiatives to encourage EV uptake announced in the National Electric Vehicle Strategy such as improving systems and charging infrastructure, and research to inform supporting an EV circular economy.

 

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