Market Insight: 1.2m sales for 2023?

VEHICLE sales for the first eight months of 2023 are through the roof in Australia and the full year is lining up to be a record with a potential target of 1.2 million deliveries on the cards.

It comes as new-vehicle demand still outpaces supply. But, while it is certainly possible 2023 will be a record sales year, the power behind the wave is set to diminish.

Pitcher Partners scrutinised the year-to-date sales data and proposed the strong outlook for the year but tempered this against a background of a tough Australian economy that is being eroded by rising interest rates, declining GDP per capita, and the diluting of the instant asset write-off that pushed sales in the past three years.

However, Pitcher Partners believes many of the vehicles driving the sales surge – for Toyota, Isuzu Ute and other brands – were ordered months ago, or in some cases last year, and that it is not necessarily representative of the true demand for new cars last month.

“OEMs are aggressively advertising and discounting to drive consumers to purchase vehicles,” it said in its latest new-vehicle report. 

Nevertheless, Pitcher Partners is forecasting this year to be a record-breaking year with annual units sold in between 1.10 million and 1.25 million.

“Currently sales are up 10 per cent, but we also noted that the last four months have been growing in the mid-teens and therefore, we would not be surprised if annual units sold came in the higher end of the range,” it said.

Despite some niggles, sales still went through the roof, said Pitcher Partners Sydney partner and Motor Industry Services lead Steve Bragg.

“Discussions with our retail dealers suggest the volumes are primarily delivering the delayed vehicles on orders as production normalises,” he told GoAuto.

“They also suggest future demand has not been as strong as the numbers are telling us.”

Pitcher Partners named Tesla, Volvo, Jeep, Suzuki, Mazda and GWM as “the main OEMs that have pulled back on their price tags”.

“The mid to long-term forecast for the industry may not be as a rosy picture as the numbers are telling us. 

“These are signs that demand for new cars is coming under pressure because of high interest rates, and to tackle this some major automotive brands started doubling down on discounts for the first time since the pandemic.”

“We are also seeing heavy discounting from MG, as they ran a plate clearance during May and June.”

Still, the strength of the accelerating market lies in the SUV sector. Overall, SUV YTD units sold are up 17.7 per cent while both passenger (up 0.1 per cent) and light commercial vehicles (up 0.4 per cent) are in line with the previous year. 

The strong performance in the SUV segment firms as the consumer’s preference for larger vehicles. 

August SUV sales were 62,313 (up 28.3 per cent on August 2022), while passenger vehicles were 19,336 (in line with August 2022). 

“In August, 56.7 per cent of the vehicles sold were SUV. However, despite common perception, the majority of those (72.3 per cent) are a medium or a smaller SUV size,” Mr Bragg said.

“The rest of the August vehicles were 17.6 per cent passenger and 21.9 per cent light commercial vehicles.”

August was a strong month for many OEMs, especially Nissan (up 154.1 per cent), MG (up 74.6 per cent), Isuzu Ute (up 68.3 per cent) and Subaru (up 59.0 per cent).

Overall, Toyota is leading the market with a total of 22,321 vehicles sold. Mazda was second
(8458), followed by Ford (7898) and Kia (6510).

“Toyota’s market share keeps moving in the right direction after a rough start to the year,” Mr Bragg said.

“Now the Japanese giant has a 17.0 per cent market share in Australia, which is now trending in the right direction with share increasing in July (16.4 per cent), June (15.9 per cent) and May (15.6 per cent).

“But it is still behind August YTD 2022 (down 20.7 per cent).”

He said Toyota’s YTD market share has increased for the fourth month in a row and it now has six models inside the overall top 20 best-selling models.

Pitcher Partners noted the strong performance of the HiLux (4561 monthly units sold, up 5.4 per cent), the RAV4 (3317 monthly units sold, up 33.6 per cent), and the Corolla (2808 monthly units sold, up 32.8 per cent).

It said that Mazda’s market share is constant in the mid eight per cent range and it is now just behind last year’s market share.

“Mazda is solidly in second place in the market for the month, selling 8458 units,” Mr Bragg said.

“The OEM has recovered from a poor start to the year and is now catching up to last year’s performance. YTD units sold are 67,189 (+0.8 per cent), and the market share position is 8.5 per cent (down 4.3 per cent).

“Strong performance of the CX-3 (1115 units sold, up 103.5 per cent) and the BT-50 4x4 (1099 monthly units sold, up 106.2 per cent).

“Ford is in third place and it keeps having an outstanding year. Ford volume for the month was 7898 (up 35.3 per cent year-on-year), and YTD volume was 53,189 (up 36.9 per cent on 2022).

“Ford sales were driven by growing supply as they have seen an easing in supply chain issues, as well as the solid Ranger 4x4 performance (5381 monthly units sold, up 33.5 per cent).”

It said that MG had a strong month. For the month units sold were 5368 (up 74.6 per cent), while YTD units are up 22.2 per cent.

“The MG ZS is now the most sold SUV YTD, while the MG3 is the fourth most sold passenger vehicle,” it said.

“However, the market-share position of the Chinese OEM is diminishing. It is down 33.2 per cent compared to the full 2022 year.

“The Chinese brand is struggling to repeat the strong back half of the year as they did in 2022.”