5 macro trends driving 2024 new vehicle sales

2023 was a bumper year for the Australian automotive sector, with more than 1.2 million new vehicles delivered. After a strong start, Toyota finished the year strongly to remain the clear number one brand, but the Toyota Hilux was dethroned by the Ford Ranger as the top model. Isuzu Ute’s D-Max claimed 3rd ahead of the RAV4 and MG ZS, with the Tesla Model Y just outside the top 5. The shift to Zero and Low Emission Vehicles was reflected in the sales results, but at the same time Heavy Commercial Vehicles also set a sales record as the market exceeded 50,000 units for the first time. These trends and more are unpacked in our 2023 year-in-review reports, which can be found here.

Looking forward to 2024 and beyond, there is a significant level of uncertainty due to the to the rapidly changing vehicle, economic and political environments. This is particularly challenging when it comes to updating our new vehicle sales and car parc forecasts, with a range of new factors needing to be considered in the latest edition.

Through this project we have therefore identified 5 macro trends that will play a significant role in the level and composition of new vehicle sales in 2024.

Two of them will impact the overall sales volumes:

1 – New Vehicle Sales Record Underpinned By Back Orders (↓)

While it was a record year for new vehicle sales, this result was underpinned by dealers clearing back orders from the supply issues brought on by the pandemic. Vehicle wait times for many brands are now returning to more normal ranges, indicating this backlog is starting to clear (at least from a private buyer perspective).

2 – fleet renewal on the cards (↑)

Private buyers may pull back given current economic conditions, but fleet buyers still have a significant order backlog, with dealers having prioritised higher margin retail customers during the supply shortages. 2024 should therefore see strong fleet sales, as they move back to more typical renewal cycles.

Focussing in on Zero and Low Emission Vehicles, we have another two trends:

3 – the hybrid recovery (↑)

We saw a clear dichotomy between H1 and H2 of CY23. Battery electric vehicles performed extremely well through the first 6 months of the year, while hybrids bounced back in the second half, mostly due to Toyota solving its supply chain issues. This suggests a level of unmet demand for hybrid vehicles, which can now be met through improved vehicle supply.

4 – EVs moving beyond early adopters (↓)

Current global and Australian trends suggest many Early Adopters have now secured electric vehicles. The next segment (Early Majority) are likely to place a greater emphasis on cost, meaning sales to this cohort are likely to be more evenly split between hybrid and electric vehicles.

The final trend is more about the longer-term evolution of the market:

5 – Unknown Impact Of Government Intervention (?)

Looking further to the future, uptake (and availability) of lower and zero emission vehicles will be heavily influenced by Government intervention (specifically, the proposed New Vehicle Efficiency Standard). While we have made assumptions as to the potential impact this will have, there is still an element of the unknown in how it will play out in practice.

The Road Ahead

As the industry navigates the uncertainties of government policies, consumer behaviours, and global economic trends, developing these forecasts remains a challenging task. The industry’s resilience, adaptability, and response to emerging trends will ultimately determine the trajectory of the Australian automotive landscape in the coming years.

Click here to access our new vehicle sales and car parc forecasts, and feel free to get in touch with the team directly if you’d like to find out more!