AAAA Aftermarket Dashboard – Q2 2023

DASHBOARD

Q2 2023

The voice of the independent aftermarket in Australia

Welcome to the Q2 2023 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.

1. State of the Market

2. EV Sales & Growth

3. Consumer Servicing

1. State of the Market

Consumer Confidence Business Confidence Fuel Prices

Australia’s consumer confidence saw a marginal increase in the second quarter of 2023, but remains weak off the back of continuing interest rate rises. Compared to historic performance, confidence remains significantly depressed, with current levels comparable to those seen during the COVID-19 pandemic.

Looking to the future however, there is a level of hope that we’re close to the peak in the interest rate rises, which should help rebuild confidence over the medium term.

Business confidence experienced a marked decline in the second quarter due to escalating production costs, persistent disruptions in supply chains, and decreased consumer demand in certain markets.

Despite stronger performance in some sectors, ongoing economic uncertainty is having an impact on investment decisions, hiring plans, and the overall business outlook.

Petrol prices remain considerably higher than the historical average, with a nominal change through the current quarter. This persistent elevation in pump prices continues to exert pressure on both consumer and fleet budgets.

Continued global geopolitical uncertainty, coupled with the reduced production volumes by OPEC members, suggests that crude oil prices are unlikely to significantly decrease soon. As a result, fuel prices are anticipated to remain elevated through the rest of this calendar year.

81.3 (

0.9) 4

Australian Economic Indicators



$1.84 ( 0.1c)

Westpac Melbourne Institute (Q2’ 23, vs. Q1’ 23)

89.8

AiP

Roy Morgan (Q2’ 23, vs. Q1’ 23)

( 8.8)

- Ave weekly price (Q2’ 23, vs. Q1’ 23)

 

New Vehicle Sales by Quarter

Impressively, despite questionable consumer confidence, Q2 of 2023 was the highest selling period over the last 4 years, beating the previous high mark of just over 300,000 vehicles set in Q2 of 2021. This was driven by historic June numbers, with 124,926 vehicles (25% up YoY) – the best result since 2018 when 130,300 cars were sold.

Closing out the financial year on a high is promising for automotive dealers, suggesting that some of the supply constraints that have been faced in recent months are starting to relax, and that we should see greater supply of new vehicles through the second half of the year.

312,757 2023 sales volume in Q2

14% Year-on-Year

285,928 209,054 303,820 275,422 312,757 0 100,000 200,000 300,000 400,000 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2

2021 2022 2023

New Vehicle Sales by State

The strong results were recorded pretty consistently across the nation, with only the Northern Territory posting a negative YoY change for the quarter. Notably, Western Australia (22%), Victoria (18%), and Queensland (17%) all posted strong growth, with Victoria coming close to edging New South Wales from the top spot of share of sales.

This is a marked change from the Q1 results (that indicated a level of hesitancy across the country). These positive numbers show strong confidence from the market when it comes to making a significant purchase.

State Q2 Volume % Chng (YoY) Q2 Share New South Wales 93,549 6% 30% Victoria 85,346 18% 27% Queensland 68,523 17% 22% Western Australia 33,079 22% 11% South Australia 19,798 11% 6% Tasmania 4,891 4% 2% Australian Capital Territory 4,630 14% 1% Northern Territory 2,941 -1% 1% TOTAL 312,757 14%

6 Australian

by Fifth

Automotive Aftermarket Association Dashboard. Presented

New Vehicle Sales By Marque

* Care should be taken when interpreting Tesla YoY change as it only started reporting sales data in March of 2022 and has significantly expanded vehicle range and Australian availability over the past 12 months

Toyota again finished at the top of the leaderboard this quarter, despite a 19% YoY decrease off the back of significant supply constraints. The Toyota HiLux continues to be Toyota’s saviour, being the top selling model for the quarter.

Looking to the rest of the top 10:

▪ Mazda remains well entrenched in second spot, with an impressive 25% YoY growth

▪ Hyundai and Kia remain largely in lockstep, with just 274 sales separating the two brands as they focus on profitability over volume

▪ Tesla had a phenomenal result in June, with the Model Y becoming the second top-selling vehicle outright, behind the Toyota HiLux

Australian Automotive Aftermarket Association Dashboard. Presented by Fifth Quadrant. Copyright © 2023. Q2 vs Q1 Rank Make Q2 Volume % Chng YoY Q2 Share 1 Toyota 51,317 -19% 16% 2 Mazda 25,107 25% 8% 3 2 Hyundai 21,025 1% 7% 4 Kia 20,751 -6% 7% 5 2 Ford 19,051 26% 6% 6 3 Tesla 15,170 6328%* 5% 7 MG 14,307 8% 5% 8 2 Mitsubishi 14,210 -23% 5% 9 1 Volkswagen 12,022 73% 4% 10 Subaru 10,995 24% 4% TOTAL 312,757 14% Toyota

7

51,317 vehicles sold (-19% YoY)

2. EV Sales & Growth

Q2 2023 Passenger / LCV Sales By Fuel Type

EVs are growing increasing popular with almost 50,000 low or zero emission vehicles sold in the second quarter of 2023.

Q2 Total EV Sales

25,696

Consisting of almost one in five sales through the period, it includes 25,696 battery electric vehicles, which is almost triple the entire number sold in 2021. Alongside this, another 2,071 Plug-In Hybrid vehicles were sold over that period, and 22,212 Hybrids.

At a brand level, Tesla remains the top EV brand, with a notably strong result in June to round out the financial year. We are however seeing progress from competitors with BYD and MG both performing well in this category.

Electric vehicle growth is likely to remain strong for the foreseeable future, as more brands and models enter the Australian market, and consumers become more willing to consider them as a legitimate alternative to internal combustion.

Vehicle Type Fuel Type Q2 Volume % Chng YoY Q2 Share Passenger Petrol 38,605 -3% 12% Diesel 2,867 2% 1% Hybrid 5,948 -15% 2% Electric 6,164 360% 2% PHEV 124 20% 0% SUV Petrol 108,723 15% 35% Diesel 27,688 -20% 9% Hybrid 16,264 20% 5% Electric 19,479 1,138% 6% PHEV 1,947 9% 1% Light Commercial Petrol 7,363 26% 2% Diesel 62,301 5% 20% Electric 53 253% 0% Total Petrol 154,691 10% 52% Diesel 92,856 -4% 31% Hybrid 22,212 8% 7% Electric 25,696 778% 9% PHEV 2,071 9% 1% Total 297,526 14%

2023 EV Car Parc By State

2023 has seen an explosion in EV sales, with more electric vehicles sold in the first six months of this year than were sold in all of 2022. While we will see this increased volume reflected in the car parc next year, EV numbers were already approaching 80,000 as of the start of 2023 (up from 39,298 in Jan ‘22).

It’s no surprise here that NSW, VIC and QLD are leading the way, but we’re seeing consistently strong growth across the country, with EV volumes doubling in most states and territories. While we’re still at the start of the EV journey, this does tell us that workshops are going to start seeing more EVs turning up on their forecourt. Now is the time to make the decision about whether to invest in the necessary tools, training, and equipment, or to refer those vehicles elsewhere.

79,700

Australian EV Car Parc 2023

10 Australian Automotive Aftermarket Association Dashboard. Presented by Fifth Quadrant. Copyright © 2023. 24,867 20,376 17,092 8,400 3,898 3,203 1,620 244 "21 "22 "23 "21 "22 "23 "21 "22 "23 "21 "22 "23 "21 "22 "23 "21 "22 "23 "21 "22 "23 "21 "22 "23 NSW VIC QLD WA SA ACT TAS NT

3.

Consumer Servicing By Vehicle Age

Consumer servicing is an increasingly competitive environment, with dealerships working hard to retain customers as their vehicles begin to age. Despite their best efforts, customers are still however shifting to the aftermarket. As can be seen below, close to half of new car owners service within a dealership network, but this drops to one in four once the vehicle is more than five years old. While some of that is DIY activity, the aftermarket is servicing well over half of older vehicles. Importantly though, if we split these results out by gender, this shift away from dealerships to the aftermarket isn’t being led by men, but by women. Just under two thirds of females who own older vehicle service them with aftermarket workshops, against just half of men. This dispels the commonly held misconceptions that women don’t engage with aftermarket mechanics, and highlights the importance of female customers to Australian workshops.

Aftermarket Dealerships

12 Australian Automotive Aftermarket Association Dashboard. Presented by Fifth Quadrant. Copyright © 2023. 11% 18% 12% 18% 11% 17% 42% 25% 41% 32% 44% 19% 45% 57% 47% 50% 45% 63% All Consumers Male Female <5 Yrs Old 5+ Yrs Old

DIY / Other <5 Yrs Old 5+ Yrs Old <5 Yrs Old 5+ Yrs Old

About AAAA About Fifth Quadrant

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, Fifth Quadrant 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 Director of Government Relations and Advocacy

Australian Automotive Aftermarket Association (AAAA)

Convenor: Automotive Products Manufacturers & Exporters Council (APMEC)

7-8 Bastow Place

Mulgrave VIC 3170 Australia

+61 (3) 9545 3333 | 0402 005 476 lyates@aaaa.com.au

For more information, please contact:

Ben Selwyn Matthew Beatty Director Account Executive

Fifth Quadrant

Fifth Quadrant 0411 132 166 0467 243 525 ben@fifthquadrant.com.au

mbeatty@fifthquadrant.com.au

Level 6, 54 Miller St

North Sydney NSW 2060 Australia

+61 (2) 9927 3333

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