AAAA Dashboard - Q4 2021 by aaaa710

DASHBOARD Q4 2021

The voice of the independent aftermarket in Australia Welcome to the Q4 2021 Edition of the Aftermarket Dashboard, a quarterly information service for members of the AAAA. This industry publication captures useful statistical and related data, as indicators of the unfolding trends and health of the automotive aftermarket industry, and has been designed to provide regular insight on our industry. We value your suggestions for improvement or feedback regarding content. Data sourced from VFACTS New Car Sales Data, ABS Motor Vehicle Census, ACA Research Consumer Automotive Survey

1. State of the Market

Year In Review

3. Growth Forecasts

4. Industry Headlines

1. State of the Market

Australian Economic Indicators Consumer Confidence

104.7

(1.7)

Westpac Melbourne Institute (Q4’ 21, vs. Q3’ 21) Consumer confidence continued its decline in Q4, as the new Omicron variant led to all-time high case numbers around Australia, dashing hopes of a COVID-free holiday period. Comparing this to the 2020’s Q4 resurgence demonstrates how unpredictable the pandemic can be.

Despite this, growing hope that case numbers have peaked and increasing numbers of booster shots provided increased confidence that we will see a rebound through 2022.

Fuel Prices

Business Confidence

116.2

(8.4)

Roy Morgan (Q4’ 21, vs. Q3’ 21) Rather surprisingly, Q4 saw a resurgence in business confidence despite the Omicron variant arriving in Australia. It appears that while some sectors (e.g. hospitality) are facing a significant impact from the outbreak, there is a broader sense that most will survive and rebound following the holiday period. Heading into the new year, reducing case numbers and increasingly levels of mobility are again likely to drive increased business confidence as we progress on the path to ‘normality’.

$1.63

( 10c)

AiP - Ave weekly price (Q4’ 21, vs. Q3’ 21) Fuel prices continued to rise, with international crude oil prices remaining high. Based on current evidence, this is unlikely to change over the short to medium term, driving fuel prices higher still. Despite the pandemic, there was still a high demand for fuel through the holiday period, as Australians chose to take intra or interstate trips instead of overseas vacations. This is likely to maintain upward pressure on local fuel prices as vendors try to keep up with increased demand heading into the new year.

New Vehicle Sales by Quarter The final quarter of 2021 saw a weaker results, underperforming the comparable period in both 2019 and 2020. While this will be driven to a certain extent by the pandemic, we’re also seeing the byproduct of ongoing stock shortages, with many manufacturers struggling to source enough new vehicles to satisfy market demand. Given ongoing supply chain issues and microprocessor shortages, this is likely to remain an issue through Q1 and Q2 of 2022, limiting new vehicle sales volumes. Market reports suggest the pressure will then begin to alleviate through the back half of the year.

233,691

2021 sales volume in Q4

-14%

350,000 300,000 250,000 200,000 150,000 100,000 50,000 0

272,077

251,403

Q3 2019

Year-on-Year

Q4 2020

Q3 Q4 2021

New Vehicle Sales by State Poor Q4 new vehicle sales results affected all states and territories equally, with double digit YoY declines across the board. Given this, it is no surprise that market share around the country remains largely unchanged. Looking ahead to 2022, any recovery should also remain largely in step across the country. Although some states (i.e. Western Australia and Queensland) have stricter restrictions in place, there are consistently high levels of consumer demand for new vehicles. The key elements that are likely to impact sales volumes will be vehicle availability, and then the ability of OEMs to distribute models across their dealer networks.

Q4 Volume

% Chng (YoY)

Q4 Share

New South Wales

76,603

-12%

33%

Victoria

61,395

-13%

26%

Queensland

48,618

-17%

21%

Western Australia

22,159

-17%

South Australia

14,889

-15%

Tasmania

4,224

-15%

Australian Capital Territory

3,778

-14%

Northern Territory

2,025

-12%

233,691

-14%

State

TOTAL

New Vehicle Sales By Marque Q4 Rank

Toyota

Make 2021

Q4 Volume

% Chng YoY

Q Share

Toyota

46,871

-29%

20%

2 2

Hyundai

18,703

-5%

3 1

Mazda

17,554

-30%

4 1

Ford

17,111

-8%

5 1

Mitsubishi

15,580

-5%

Despite dropping 29% in YoY sales, Toyota is still a clear market leader, holding more than double the share of any competitor, with 1 in 5 vehicles sold throughout the Q4 period being a Toyota.

6 1

Kia

14,648

-5%

Moving down the top 10, we can see significantly levels of movement:

7 2

10,147

80%

8 3

Nissan

9,611

-18%

▪ A relatively strong quarter from Hyundai saw it leapfrog Mazda and Ford to claim second spot by 1,149 vehicles

9 1

Volkswagen

8,455

-13%

Subaru

8,252

-13%

TOTAL

233,691

-14%

46,871 vehicles sold

▪ The only brand to post positive sales growth YoY was MG, climbing up to 7th and posting an 80% increase as it cracked 10,000 sales for the quarter.

▪ Nissan enters the top 10 in 8th, climbing 3 spots to overtake VW and Subaru, while Isuzu fell just short of Subaru to sit in 11th .

2. Year In Review

New Car Sales By Buyer Type 539,242

PRIVATE

445,495

378,506

BUSINESS

GOVERNMENT

RENTAL

371,389

28,520

Despite closing out the year poorly, 2021 was definitely an increase on the year before, with more than a million vehicles sold (up from 882,401 in 2020). This growth was particularly driven by Private buyers and rental fleets, with business generally in line with 2020, and government purchases down slightly. While private buyers contributed the most to the growth, with this segment up 93,747 sales year on year, it’s particularly interesting to look at the shift in rental fleets. Their substantial YoY increase (up 74%) demonstrates that they are confident in rebuilding their fleets off the back of the pandemic, expecting to see a commensurate increase in hiring activity as personal and business mobility continue to increase.

30,841

60,242 34,676

2021

2020

Vehicle Type

2021 Volume

% Chng from 2020

2021 Share

Private

539,242

↑21

54%

Business

378,506

↑2

38%

Government

28,520

↓8

Rental

60,242

↑74

New Car Sales By Fuel Type 580,495

PETROL

527,871

346,990

DIESEL

290,659

HYBRID

The resurgence in 2021 saw strong growth across all fuel types. Despite many countries shifting away from diesel, it also recorded strong YoY growth, underpinned by four utes making the top 10 list of vehicle sales for 2021. Sales forecasts over the next few years indicate that the number of utes on Australian roads will continue to rise, so this is likely to hold true over the immediate future. Looking further out, we will see more of a transition to electric vehicles. For now however, they remain in their infancy, making up around 2% of total sales. The 2021 sales volumes are however almost triple those recorded in 2020, highlighting the accelerating growth trajectory.

70,466 60,417

EV*

20,665 6,900

2021

Fuel Type

2021 Volume

% Chng from 2020

2021 Share

Petrol

527,871

↑10

57%

Diesel

290,659

↑19

34%

Hybrid

60,417

↑17

20,665

↑199

2020

* Note: EV data includes a combination of VFACTS data and Tesla sales figures reported via the EV Council Australian Automotive Aftermarket Association Dashboard. Presented by ACA Research. Copyright © 2022.

3. Growth Forecasts

Overall Car Parc Projections 18,000,000

15,909,278 16,000,000

14,850,678 13,815,108 Passenger Vehicles

14,000,000 12,000,000 10,000,000 8,000,000 6,000,000

2,985,595

3,519,457

4,058,246 4,000,000

LCV 2,000,000 -

SUV and Ute sales help strengthen Light Commercial Vehicle and Passenger Vehicle Projections With both SUV and Ute sales collectively on the rise, it is no surprise to see the number of passenger vehicles and LCVs in the Australian car parc continuing to trend upwards in the years ahead. Utes (which form the bulk of light commercial vehicles) are one category that has seen substantial growth. Based on that, we predict that between 2021 and 2026, there will be a 15% increase in registered vehicles. This is mainly due to models such as the Toyota Hilux and Ford Ranger, which continue to record strong sales figures year after year.

2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 Source: Source: 2016-21 ABS Motor Vehicle Census Australian Automotive Aftermarket Association Dashboard. Presented by ACA Research. Copyright © 2022.

SUV’s Projections 646,525 700,000 562,666

600,000

474,556

500,000

Toyota Landcruiser

400,000

317,633 300,000

195,111

Toyota Rav4

200,000

Subaru Forester Nissan X-Trail

75,591

100,000

Mazda CX-5 2016

63% increase in Mazda CX-5 see’s it claim 3rd spot by 2026

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

Similar to the dominance displayed by the Toyota Hilux in the Ute category, the Toyota Landcruiser has comfortably claimed the top spot for SUV’s, and given the launch of the 300 series, will likely do so for years to come. The rejuvenation of the RAV4 further highlights Toyota’s dominance over Australia’s automotive landscape, with this model claiming second position.

The interesting battle will however be for 3rd place. Back in 2016, the Mazda CX-5 was nowhere near the likes of the Nissan X-Trail, or the Subaru Forester. If however it can continue its current trajectory, we could see it overtake the Forester in 2022 and the XTrail in 2026 to claim the 3rd position in SUV’s.

Ute Projections 1,000,000

892,681 900,000

754,425

800,000 700,000

618,940 Toyota Hilux

541,754 600,000 500,000

350,789

400,000 300,000

Nissan Navara Mitsubishi Triton 161,324

200,000

Ford Ranger Holden Colorado

100,000 2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

Ford Ranger to climb 54% between 2021 and 2026 to widen gap between 2nd and 3rd Given Australian’s continue to purchase high volumes of Utes, it is also interesting to look at how the top models are likely to trend over the next 5 years. It is no surprise the Toyota Hilux is likely to dominate the market for years to come, as it consistently posts record sales numbers and will soon become the most popular vehicle in Australia overall. Looking below the Hilux, the battle for second appears somewhat over, with the Ford Ranger surging past the Nissan Navara and Mitsubishi Triton to firmly embed itself in 2nd (with this gap predicted to grow over the next five years).

4. Industry Headlines

Industry Headlines Shock new reason for car delays and price rises It has been no secret that the global semi-conductor shortage has created issues for Australians trying to get their hands on a new car. However, automotive logistics experts explain that the number of car-carrying freighters coming to Australia have halved since the beginning of the pandemic. Not only the issue of quarantining, but the fact Australians are buying larger vehicles such as Utes, 4WD’s and Vans, is proving difficult for freighting companies to keep up with demand whilst managing the costs associated.

Bapcor begins complete digital transformation Bapcor has recently opened a state-of-the-art 50,000 square meter distribution center in Tullamarine, Victoria. Being Australasia’s largest automotive aftermarket specialist company, Bapcor believed it was necessary to undergo a complete digital transformation if its customer-facing and back-end business systems. This project allowed for the introduction of innovative business technology that they believe best suited the retail, trade, wholesale and inventory management requirements of respective automotive aftermarket companies

Australia's First Hydrogen Fuel Cell Manufacturing Facility Signals Greener Future for Automotive Industry Australian energy tech company, LAVO Hydrogen Technology limited has been given permission to build Australia’s first hydrogen fuel cell manufacturing facility in Queensland. This is a huge step forward in the Australian Automotive industry as further actions are being made towards a greener future.

Car industry counts down to cleaner fuel, to pave way for low-emission vehicles Australia’s last two remaining oil refineries are set to be upgraded to the latest European standards over the next two of years. This will pave way for the introduction of new hi-tech ultra-low-emissions petrol cars. Only 20 years ago there were 10 refineries in Australia, and with the Federal Governments $2 billion support pledge to prop up the two remaining refineries, it will avoid reliance on imported bowser-ready fuels.

Bosch-INEOS service partnership the first of many A recently announced partnership between the Bosch Car Service network and INEOS Automotive within Australia may allow the two companies to replace the time-honored tradition of the dealership service model. With the Grenadier 4x4 arriving in mid 2022, Bosch will be able to provide INEOS with coverage that will be required to service a start-up in a country with obvious geographical challenges.

New 4x4s arriving in 2022 With domestic travel becoming more attractive as a subsequent to international travel restrictions, many Australians are looking at 4x4’s for longer road trips. Even though the global semiconductor chip shortage and Covid-19 lockdowns have delayed new vehicles on Australian shores, new 4x4’s such as the Ford Everest, Ineos Grenadier, Lexus LX, Ford Ranger, Jeep Grand Cherokee, Mazda BT-50 and the Volkswagen Amarok W580X

About AAAA

About ACA Research

The Australian Automotive Aftermarket Association, is the national industry association representing manufacturers, distributors, wholesalers, importers and retailers of automotive parts and accessories, tools and equipment, as well as providers of vehicle service, repair and modification services in Australia.

With over 20 years of automotive experience, ACA Research has developed a detailed understanding of the automotive sector, Using this market knowledge, we design and deliver research that helps our clients understand and overcome their business issues, empowering them to move forward with confidence.

For more information, please contact:

Lesley Yates

Ben Selwyn

Mark Bastoulis

Director of Government Relations and Advocacy Australian Automotive Aftermarket Association (AAAA) Convenor: Automotive Products Manufacturers & Exporters Council (APMEC)

Director ACA Research 0411 132 166 bselwyn@acaresearch.com.au

Account Manager ACA Research 9927 3317 mbastoulis@acaresearch.com.au

7-8 Bastow Place Mulgrave VIC 3170 Australia +61 (3) 9545 3333 | 0402 005 476 lyates@aaaa.com.au

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