VFACTS June: First cracks appear in booming market

The first signs that the Australian auto industry’s recent boom is about to bust amid cost-of-living pressures and the threat of higher interest rates emerged today, when VFACTS figures showed new-vehicle sales dropped 4.2 per cent in June compared to the corresponding month last year.

Although car-makers returned to a traditional end-of-financial-year marketing frenzy – many for the first time since before the COVID-19 pandemic hit vehicle supplies and created a long bank of delivery delays – the 119,659 new cars sold across Australia last month was 5267 fewer than in June 2023, when supply shortages were easing and sales of EVs and diesel utes were running hot.

It’s the first monthly downturn since March last year, ending a long period of mostly record-breaking double-digit year-on-year growth, with mid-size ute sales down 2.4 per cent for the month (to 23,622 units) and EVs dropping 13.2 per cent (to 9583), despite significant new entrants to both segments.

The nation’s biggest-selling vehicle class, mid-size SUVs, also fell 3.0 per cent last month (to 27,386 units), while large SUVs slumped by 14.8 per cent (13,097), upper-large SUVs slipped 8.6 per cent (2451) and entry-level light-sized SUVs plummeted 19.1 per cent (4110).

Small SUVs were the only ones to buck the trend, rising 2.9 per cent to 18,204 units.

Overall, SUVs across all segments were down 5.5 per cent, light commercial vehicles (mainly utes) slid 3.3 per cent and heavy commercial vehicles, which are a reference point for business confidence, plunged 17.6 per cent.

Passenger car sales held firm, up 3.3 per cent, however across the entire market, sales to private buyers (-1.9%), businesses (-4.4%) and rental companies (-26.5%) were all in negative territory, leaving only government purchases in the black (+33.7%).

At the halfway mark of 2024, the Federal Chamber of Automotive Industries (FCAI) is naturally putting a positive spin on the results, which place sales up 8.7 per cent for the year to date with a record 632,412 new registrations already banked.

That surpasses the previous record of 605,522 units for the first half of 2018, and while FCAI chief executive Tony Weber described it as “testament to the resilience of the market”, car industry leaders are expecting the downward trend to continue during the second half of the year.

Keeping that in mind, the YTD figures across the key segments and some of the major brands and models look strong in isolation.

Healthy gains were made in the first half in the leading categories – mid-size SUVs (142,307, +9.3%), 4x4 utes (108,062, +14.0%) and small SUVs (92,588, +15.8%) – while the 50,219 EVs sold over the first six months represents a 16.5 per cent YTD uptick, keeping the goal of 100,000 annual sales within reach.

That said, EV sales pale next to the flourishing hybrid car segment, which has passed 80,000 units already this year (81,613, +113.3%) as market leader Toyota throws its weight behind this category like never before – and brings buyers along with it.

The same can be said for diesel-powered vehicles (193,859, +10.2%), where Toyota also dominates, although this year its top-selling HiLux ute is still playing second fiddle to the Ford Ranger, which remains Australia’s most popular vehicle with 33,531 sales (+25.4%) across the first half.

HiLux is second on 28,515 (+1.5%), with the resurgent RAV4 third on 25,405 (+87.9%), underscoring Toyota’s sheer dominance – 121,301 total sales this year (+31.5%) – in an increasingly competitive marketplace where more than 50 brands are operating (not including heavy commercials).

Ford is second (49,622, +30.0%), having relegated Mazda to third for the time being (48,547, -3.7%), while Kia (41,300, +5.5%) is holding onto fourth ahead of Mitsubishi (39,634, +28.5%) in fifth.

There’s a lot of deckchair shuffling in the bottom half of the top 10 ladder, which is sure to continue throughout the second half of the year, but for now Hyundai remains solid in sixth (36,082, -4.3%) and you can throw a blanket over the rest: Isuzu Ute (25,903, +27.2%), Nissan (24,916, +28.5%), MG (24,593, -7.9%) and Tesla (23,116, -9.6%).

Subaru remains within striking distance (21,743, -3.4%), while GWM is moving up the ranks (21,524, +22.7%) with its GWM, Haval, Tank and Ora model lines.

Fast-growing BYD is another Chinese brand to watch, securing 9549 sales (+54.1%) in the first half while it strives for 50,000-plus over the same timeframe within two years as new models such as the just-launched Sealion 6 mid-size SUV and the forthcoming Shark ute take hold.

For the record, Chinese-built cars accounted for almost 100,000 sales in the first six months of this year (96,981, +1.2%), cementing China as the third most popular country of origin behind Japan (193,424, +25.1%) and Thailand (141,813, +16.0%).

We’ve detailed the market’s year-to-date progress, but the June results handed down today point to how the major brands fared in what is traditionally one of the strongest months on the calendar as the financial year comes to a close.

Perhaps most strikingly, MG, which has been a permanent fixture among the top 10 brands, dropped out to 11th position last month with 4224 sales – down 29.8 per cent on June 2023 – while GWM was biting at its heels with an all-time monthly high of 4173 sales (+7.1%).

At the top of the table, Toyota posted an emphatic 20,903 sales last month – lineball with its similarly hefty result in June last year (-0.2%) – and held four positions among the top 10 best-sellers: second (HiLux, 5630), third (RAV4, 3907), ninth (Corolla, 2232) and 10th (Camry, 2687). The LandCruiser 300 Series, 70 Series and HiAce van were also above 1000 units apiece.

Ford held second position (9493, +22.4%) as the Ranger ute maintained bragging rights as the number-one model in the land (5630), ably supported by the related Everest SUV (eighth, 2267), while Mazda was just 10 units behind the Blue Oval on 9483 sales (-2.3%).

A big end-of-financial-year push saw Mazda’s CX-5 (2687) place seventh overall among the top sellers.

Kia was a solid fourth (8225, +8.9%), holding out an equally firm Mitsubishi (7723, +48.9%), while Hyundai remained some distance behind in sixth (6552, -20.2%).

Just 390 sales separated seventh and 10th position last month, with Tesla (4683, -33.3%) heading that band with help from the Model Y (2906) in fifth among the best-selling cars (a year ago, the Y was second in market behind HiLux).

Subaru finished eighth last month (4460, -9.3%), ahead of Isuzu Ute (4445, +23.1%) and Nissan (4293, +55.6%).

Outside the main table, Volkswagen (3758, -26.7%) was a distant 13th behind MG and GWM, while BMW (3146, +3.6%) held-out arch-rival Mercedes-Benz (1951, -20.5%), which was further afield.

Polestar, which now reports its sales through the Electric Vehicle Council rather than the FCAI-run VFACTS, sold 356 examples of the Polestar 2 last month, taking its year-to-date total to 950 units – down from 1147 at the same point last year (-17.2%).

Top 10 brands (2024 year to date):

Top 10 models (June 2024):

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