Skoda says flat sales are now a ‘win’ in Australia’s fragmented car market

As Australia’s new car market continues to fracture, Skoda says stagnant sales are a sign of success, noting that the market can only be so big.

Legacy brands are facing increasing pressure as new entrants and challenger brands – predominantly from China – continue to expand the number of manufacturers competing for Australian buyers.

Škoda says the market is undergoing a broader ‘recalibration’ with the industry potentially needing another three to five years to settle into a ‘new normal’.

“There is a recalibration. This year, it has just started. But I think we have ahead of us another three years, at least maybe three up to five,” said Skoda Australia brand director Lucie Kuhn.

She pointed to the sheer number of brands now competing in Australia, saying there are more than 70 competitors in the market.

“It's a lot,” she added, saying “Every brand now needs to find their viable new normal.”

With so many brands competing for the same pool of buyers, the individual slices of the pie get smaller and Kuhn said the market could not simply continue expanding indefinitely.

That means Skoda believes maintaining sales volumes can represent a positive result, rather than every brand needing to deliver year-on-year growth.

“Being able to deliver the same volumes as last year is … relatively solid,” Kuhn explained.

She said the focus for manufacturers was increasingly shifting away from chasing volume at all costs, towards finding a sustainable balance between sales and profitability.

The comments come as manufacturers also contend with broader market challenges beyond the influx of new brands, including inflationary and cost-of-living pressures, not to mention fuel price fluctuations.

Moving forward, Skoda is focused on maintaining the momentum of its EV sales, with around 40 per cent of its current Australian range now electrified.

The brand believes its expanding lineup of EVs and PHEVs will give it ‘some space’ under the current NVES or CO2 emissions regulations while it waits for the scheme to be reassessed.

The Epiq and Peaq electric SUVs are next in line for Australia, while a range of plug-in hybrid models will arrive locally before then.

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