Australian auto market to dip to pre-COVID levels, says Toyota

Rising interest rates and the high cost of living will drive down new-vehicle sales in Australia next year, paring back sales to 2019 levels and restoring some post-COVID normality.

That’s the opinion of senior Toyota Australia executives, who say current record monthly sales in Australia are the result of pent-up delivery delays and not a reflection of where the market is at.

In the most recent October sales report, VFACTS industry data revealed a 22.3 per cent volume increase over October 2022, marking the first time that one million sales have been notched up before November.

Speaking with carsales at the launch of the 2024 Toyota LandCruiser 70 Series this month, Toyota Australia vice-president of sales, marketing and franchise operation, Sean Hanley, said those figures were an inflation of what’s really happening in the market.

“We’re pretty healthy in the Australian market. The demand is quite strong, although the order write isn’t as strong as it was six months ago – there’s no doubt that it’s cooling off,” he said.

“It’s been cooling off since March this year, to be honest. We suggest the current demand is similar to the demand we saw in 2019, pre-COVID.

“However, on VFACTS, that’s not what you’re seeing. Instead, it’s record sales and record months in a market that will probably end up at 1.2 million sales for 2024.

“However, they’re vehicles that were probably ordered a year or so ago. What you’re seeing now on VFACTS is brands’ capability to deliver cars that they took orders on a year ago.

“For Toyota it’s still a case of what we can deliver rather than the natural demand of the market.

“The economy’s not falling off a cliff and it won’t. But it’s pre-COVID normal and it’s healthy.”

The sales slowdown comes as Toyota prepares to ramp up production of some of its most in-demand models in the first half of 2024, including RAV4 Hybrid and LandCruiser 300 Series.

The increase in production is due in part to other global markets slowing down their order books, Hanley said.

“[The delivery wait time for] LandCruiser 300 Series is down to eight months, and by April next year it will be down to six months,” Hanley promised.

“RAV4 Hybrid is currently 13 months and by April next year the wait time will be down to about six months.

“A little bit of it is Japan ramping up production and obviously different markets around the world have different demand and supply.”

Echoing comments made by Hyundai Australia chief John Kett recently, Hanley said Australia’s 2024 auto market would look a lot more like it did in 2019 – rather than 2023, when it could top 1.2 million sales.

“We’re not thinking next year’s market will be 1.2 million. We’re probably thinking 1.05 million or 1.1 million. It will normalise,” he said.

Toyota is predicting it will once again climb above a 20 per cent market share in 2024, after falling below the figure in 2023 due to a fragmenting market, a lack of Camry and RAV4 Hybrid supplies, and an influx of imports from China, including from Tesla, MG, BYD, GWM-Haval and Chery.

“We’ve dropped below 20 per cent, which is disappointing for us because we were there for a while,” Hanley said.

“We believe we have the capability, product offering and order demand to get back to 20 per cent market share in 2024. The real reason we’ve dropped below 20 per cent… is we couldn’t deliver the hybrid order bank we’ve had for the better part of 18 months. It’s massive.

“It’s a production and delivery issue, not a demand issue for Toyota in Australia.

“We don’t accept that we’re a below 20 per cent market organisation. We are this year and that’s the way it’s going to turn out, but we intend to get back to 20 per cent next year.”

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