AAAA Dashboard Q3 2022

The voice of the independent aftermarket in

1. State ofthe Market

Australian Economic Indicators

Consumer Confidence Business Confidence

Prices

Consumer confidence has fallen again off the back of further interest rate rises and inflationary pressure in critical household categories such as groceries and utilities.

suggestions are that we are moving towards the end of this cycle locally, major economies around the world appear to be facing significant pressure; allied with ongoing uncertainty around the war in the Ukraine this will continue to impact consumer confidence into 2023.

confidence has also fallen through Q3, dropping into negative territory (under 100) as businesses continue to face cost pressure and inconsistent supply. In particular, any businesses involved in the distribution or supply of imported products will continue to struggle given weaker exchange rates and high shipping costs.

Alongside this, ongoing issues around the availability of labour are likely to persist, particularly in sectors like automotive that require significant investment of time and money into staff training and development.

Petrol prices fell in Q3, averaging 7c a litre less across the country than in the previous quarter. We can however foreshadow a significant rise in Q4 given the end of the 6-month reduction in fuel excise on the 28th September. This allied with reduced global production forecasts mean that fuel prices will rise, placing further pressure on already stretched household budgets. It will also eat away at business profitability, which is particularly concerning for low margin sectors like road freight transport.

New

Sales

New Vehicle Sales by State

State level results vary significantly, but we do need to consider where each of them was in Q3 2021, with the states that had less COVID-related restrictions in place (e.g. Western Australia) facing less significant reductions in vehicle sales. As a result, some of the data we’re seeing in this quarter is really a correction to the norm, as against a strong improvement.

Ultimately, the distribution of new vehicle sales across the country is largely reflective of population proportions as consumers and businesses nationwide return to more normal vehicle ownership and replacement cycles.

State Q3 Volume % Chng (YoY) Q3 Share

New South Wales 85,965 19% 31%

Victoria 72,496 10% 27% Queensland 60,913 4% 22%

Western Australia 25,487 -8% 9% South Australia 17,356 0% 6% Tasmania 4,568 6% 2% Australian Capital Territory 4,083 21% 1% Northern Territory 2,404 -9% 1%

TOTAL 273,272 9%

Australian Automotive Aftermarket Association Dashboard. Presented by ACA Research. Copyright © 2022.

New Vehicle Sales By Marque

New vehicle sales by brand remained somewhat turbulent through this

more by

availability

remains firmly anchored to the top of the list, selling more than 55,000 vehicles through the quarter.

With that said,

Mazda also had a strong quarter, displacing its

competitors to take 2nd

3rd,

1,000

Kia also managed to hold

separate the two

as they combined for more than 40,000 sales in the quarter.

down,

as

continues

push a strong EV line-up (as part of

2. Vehicle Trends Over Time

Manufacturing Location (Top

Given Toyota’s position in market (as well as other brands such as Mazda and Mitsubishi), it’s no surprise that Japan is consistently the top country of origin for

sold in Australia. Thailand and Korea then take 2nd and 3rd

off the back of well established

operations in each country.

down the list, we can see a shifting dynamic, with more Chinese-made

entering the country, as the number of German, American and British made vehicles declines.

is likely to continue this growth in coming years, with brands like BYD planning aggressive expansion in Australia.

Annual Sales by Buyer Type

We have also seen some shifting trends in buyer type over recent years. Private and fleet buyers clearly have different needs when it comes to maintaining their vehicles, so this trend is important to understand.

Prior to the pandemic, we saw declining levels of private vehicle purchasing, with a greater proportion going to fleet buyers (whether business, govt, or rental fleets). That trend ended in 2020, with almost two thirds of vehicles sold to private purchasers. Meanwhile, businesses pulled back sharply on spending, with 2020 sales back below 2015’s results.

Despite the end of the pandemic, challenging economic conditions in 2022 suggest that it could take a while for business spending to return to the more buoyant level, suggesting that consumers will make up the bulk of new vehicle buyers for a certain time yet.

Private

Type Breakdown

Digging deeper into vehicle purchasing, and we can see some trends in the types of vehicle they purchase as both groups move away from passenger vehicles. In both cases, the proportion of passenger vehicles purchased in 2021 is around half (or less) of what it was in 2015.

While the overall pattern is similar, we can however see that the destination is quite different. Since 2019 more than half the privately purchased vehicles have been SUVs, with this segment now making up almost two thirds of sales. Surprisingly, despite the greater presence of utes on Australian roads, they still make up a similar share of total sales to private buyers.

In contrast, business buyers are more evenly split with around two in five vehicles purchased being SUVs, and a similar proportion being utes.

3. EVSales & Growth

EV

Vehicle

a

that is to a

of

EV Car Parc and Projections

Registered Electric Vehicles

Electric

share of the

has grown

tenfold over the past 8 years, climbing from 2,976

in

to 20,310

can see though that

in

by more than 50% in the last year,

still only represent 0.1% of the total

are still a minor consideration in absolute terms, but this increase gives a good indication as to the current trajectory for electric vehicles, particularly as a wider

models are introduced into the market.

of more

Industry Headlines

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ACA Research