Australia’s New-Vehicle Sales Drop to Lowest Since 2011

Holden sales collapse. “Tough Year for the Australian Economy.”

By Wolf Richter for WOLF STREET.

Australia is next as we’re tracking the decline in global new-vehicle sales that started in the US in 2017 and took on serious dimensions in 2018 with vehicles sales falling for the first time in modern China, the largest auto market in the world.

New-vehicle sales in Australia fell 7.8% in 2019 to 1,062,867 units, the lowest since 2011, after having already fallen 3.0% in 2018, for a combined decline from the historic peak in 2017 of 10.8%. The sales declines in 2019 got worse all year, well before the horrific wildfires began. And December, when the wildfires were raging, new vehicle sales actually fell “only” 3.8% year-over-year. Soley blaming the wildfires would miss the target:

“2019 reflects a tough year for the Australian economy, with challenges including tightening of lending, movements in exchange rates, slow wages growth and, of course, the extreme environmental factors our country is experiencing,” the report by the Federal Chamber of Automotive Industries (FCAI) said.

By vehicle categories, according to auto industry portal Mark Lines:

  • SUV sales, which account for 45% of total sales, declined 2.4% to 483,388 units.
  • Sedan sales, which account for 30% of total sales, plunged 16.5% to 315,875 units.
  • Sales of “commercial vehicles” – pickups and vans, in USian industry lingo – which account for 21.2% of total sales, fell 5.2% to 225,635 units.
  • Heavy commercial vehicle sales fell 8.3% to 37,969.

Toyota was by far the market leader with a market share of 19.4%, up from a share of 18.8% in 2018, and up from a share of 18.2% in 2017. But even Toyota’s sales fell 5.2% in 2019 to 205,776 units.

The Toyota Hilux pickup – categorized as a “commercial vehicle” – was the number one best-selling vehicle with 47,649 sales. The Hilux is not sold in the US but is widely popular around the world. It’s built on a similar platform as the Tacoma in the US. But there are differences beyond styling.

The Hilux is somewhat more spartan, and thus a little more “commercial,” than the Tacoma which is marketed as a personal vehicle and is a little wider to give passengers more room. One of the big differences are the engine choices, which include two 4-cylinder turbo-diesels for the Hilux, true workhorses that are not available for the Tacoma.

Toyota’s Corolla was the third-best-selling vehicle with 30,468 units sold.

Mazda was second, with a market share of 9.2%. Its sales fell 12.3% to 97,619 vehicles.

Hyundai was third with a market share of 8.1%. Its sales fell 8.6% to 86,104 vehicles. Its i30 was the fourth-best-selling model with 28,378 sales.

Mitsubishi, in fourth place with a share of 7.8%, saw sales tick down 2.0% to 83,250 vehicles. Its Triton pickup was the fifth-best-selling vehicle with 25,819 sales.

Ford, in fifth place with a share of 6.0%, saw sales fall 8.4% to 63,303 units. Despite being this low on the totem pole overall, Ford had the second-best-selling vehicle, the Ranger pickup, with 40,960 sales.

General Motors is represented by its Australian subsidiary Holden, which has fallen on hard times and ended vehicle and engine production in 2017 and now just imports vehicles. Holden was in 10th place, behind Kia (6th), Nissan (7th), Volkswagen (8th), and Honda (9th). For the year, Holden’s sales collapsed 29% to 43,176 units.

In the US, new vehicle sales in 2019 fell again, though a few automakers booked sales gains. Here are the vehicle charts for each of the top automakers. Read… US New Car & Truck Sales in 2019 Fell Below Year 2000 Level, 3rd Year in a Row Below 2016 Peak

In Canada, sales fall for second year in a row, as car sales collapsed further and truck sales barely ticked up. Read... Carmageddon Spreads to Canada

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  35 comments for “Australia’s New-Vehicle Sales Drop to Lowest Since 2011

  1. Ex Pat Kiwi says:

    Wolf do these stats exclude used car imports into Australia?

    I know in New Zealand that used car imports, mostly from Japan make up a huge percentage of car sales. New cars are mostly to Government agencies, rental companies and those citizens with $$. But, with the huge house price increases in New Zealand over the last 15 years every man and his dog has borrowed equity from his house to buy new toys such as a new car.

    • Wolf Richter says:

      These stats are NEW vehicles only.

      • Iamafan says:

        How much of these sale “drops” can be accounted for because of HIGH perceived prices? Are buyers just waiting for prices to drop ???
        Are they playing the waiting game.

        Consider an example of crazy bidders at Treasury auctions.
        During (or about) the last quarter of 2019, about 12 competitive bids at extremely low yields (0.880%) were bid at 2/3/5/7/10/30 year bond auctions. Since 5% of the amount of accepted competitive tenders was tendered at or below that yield, then at least $19.6 billion were bid at that ridiculously low yield.

        Just to give how crazy this bid was, the 30Y’s lowest recorded yield was 1.94% on Aug 2019. The MEDIAN yield at this 12-Dec-19 auction was 2.265%. So why bid a very high price with a yield of 0.88% when you could have the bond at a much lower price???

        Who are these crazy people? I guess the same crazy ones begging to be saved at repo. Since repo collateral is valuated at market price, you can just imagine the “losses” of these crazy people.

        Now these treasury buyers were SPECULATING that yields were going to drop to ZERO. So far, they are wrong. What if car and truck buyers are doing the exact opposite – waiting for the price to drop.

        • Bobber says:

          In the 09 recession, prices dropped a fast 10% as dealers cleared inventory. I know, because I picked up a new Honda Accord for $18,000. Once inventory cleared, prices went back up.

    • Willy2 says:

      – New Zealand has had a housing bubble in the last say 10 to 20 years. And that housing bubble is now in the 1st stages of deflating as well. Just imagine what that will do to car sales in NZ.

    • Cashboy says:

      Australian motor vehicles are nearly all manufactured outside Australia.
      Holden (GM) manufactured in Australia but they stopped manufacturing.

      Most Toyotas are imported from Thailand:
      Corolla
      Camry
      Hilux Revo (smaller Taconma)
      Fortuner (Forerunner SUV)

      Ford Ranger Pick Up is imported from Thailand

      Mitsubishi Triton is imported from Thailand

      Mazda is imported from Thailand (2, and 3) and BT50 pick up. Biger models imported from Japan.

      Honda Civic, Accord imported from Thailand.

      Isuzu pick ups, SUV and lorries imported from Thailand.

      It is actually amazing the amount of car and motorbike production in Thailand.

    • Mike G says:

      Used vehicle imports are not a significant part of the market in Aus, unlike NZ. Under 10k a year.

      • char says:

        That is because Aus had a car industry till 2017. This will change.

        • Anton Tzar says:

          That depends. You should see the amount of red tape and expense you have to go to in Australia to bring in a used vehicle – even if you owned it previously overseas.

  2. MCH says:

    I believe the HiLux is a really good vehicle when used as a technical. Heard it had really good reliability and very repairable in field.

    So, given how big Australia is, it’s not a surprise that reliability sells there.

    • Herethere says:

      The HiLux is a trademan’s car of choice, and thus receives taxation benefits through work deductions and other incentives which tends to inflate the market. Also being able to tow and go 4×4 makes it ideal for recreational use. It will be interesting to see what happens to such demand if/when a solid building downturn hits.

  3. johnny says:

    the lucky country hasnt had a recession in 20 years. It is fine unless the Chinese catch pneumonia. Doomsayers will be proven wrong.

    • Willy2 says:

      – The “Lucky country” is running out of luck very fast. It has had a housing bubble as well in the last say 20 to 25 years. That “luck” was build on a mountain of (mortgage) debt that now is deflating. Australia has the highest or the second highest debt-to-GDP ratio in the world.
      – And now they have to deal with the inevitable (credit) deflation, the inevitable aftermath of the credit bubble. Just look at what happened in the US in the aftermath of their housing bubble of what’s coming down the pike for Australia.
      – So, even without “China catching pneumonia” the goose called Australia is cooked. An economic slowdown in China will only make things (much) worse.

    • Willy2 says:

      – The total amount of foreclosures in Australia has increased by some 600 (!!!!) percent. and this figure is already a 6, 7, 8 months old.

  4. stan6565 says:

    Maybe, just maybe, ozzies have less money to spend. Despite the great credit leap and optimism pumped into everybody’s head via their tv radio and news.

    They sell a mountain of highly valuable fuel and ore every second of every day of every year for the last 20 years, but that money never gets to the plebs and chaff. How can they then buy new expensive gear, like cars.

    • fajensen says:

      ‘They’ being the American, Chinese and Indian owners of the mining companies ….

  5. andy says:

    Car sales in US, China and now Australia are falling far faster than GDP.
    Why?
    Its not substitution to EVs, not yet.
    is it alternatives, like inner city living, electric scooters and bikes resulting in no car families.
    I read 10% of people who sell cars are not replacing them.

    • Anthony Aluknavich says:

      Besides new car prices being in the stratosphere, insurance costs are escalating and repairs/maintenance costs are like going to the dentist these days.

      Al this adds up to people keeping used cars longer and thinning the herd of cars in families where there are multiple drivers. It all adds up.

    • Jon says:

      Car sales in India has fallen quite a lot. Few of my friends in India in big cities have sold their cars and using car/ride shares like Uber. Ola etc.

      • Sammy Iyer says:

        INDIA Cars/SUV/Compact SUV sales fell below 3 million units in 2019(Negative 20% growth yoy) (excluding mini commercial open/closed bed trucks up to 6 tons).
        (SUV is the only segment growing due to introduction of many SUV models like KIA Seltos /MG Hector & others) (new SUV cost $15-20,000)
        I live in the heart of a metro city .I had a Suzuki WagonR & Hyundai Santro for 5 years .(both 1000cc tall boy) sold both of them a year back & bought a new Suzuki Alto 850cc compact petrol car(smallest in suzuki line up new $5500) for wifey to drive around.No small kids.Only daughter studying Masters Degree in germany.
        To move around alone-I drive a 5 year old Yamaha Alpha 110 cc automatic gear scooter ( 40km/litre mileage.Purchased New vehicle on 1-1-2015 @ $1100)
        Since I live /work in a compact area , driven only 15000 km’s in the scooter in 5 years. I only renew “3rd party Liability insurance” for my scooter $20/year (my vehicle damage is not covered but opposing party hit by me is covered. This is Govt mandated.)
        1 year old Suzuki ALTO compact Car has comprehensive annual insurance of $200 per year.
        Uber /Ola rides are very popular . can travel 10km in non peak hours for <$5. Uber share is still cheaper & even college students use.
        There is no road space.Govt's world over should improve public transport & stop talking about new car sales. All auto component factories have laid off staff massively.
        After started driving scooter after a 20 year gap- I dont feel like sitting in the car traffic jam any more compared to the freedom of zipping thro any narrow space via scooter. Car only for going to club/social occassion as a family.

    • Willy2 says:

      – I just read that german carproduction was down 9% in 2019. Ouch & OMG.

    • Cashboy says:

      Andy,

      Australia won’t be going EV for a long time.
      Have you seen the distances between cities in Australia?

      You cannot beat a Toyota Hilux (smaller Tacoma ) 2.4 or 2.8 diesel or a Toyota Fortuner (Forunner) 2.4 or 2.8 diesel for long trips in Australia accross the dirt trails.

  6. PaulJ says:

    May be we are reaching saturation point for new vehicle sales in Oz. Vehicles are an expensive asset to own and operate. My wife and I spent 15 years in Sydney without a vehicle, relying on buses, trains and ferries to get about to and from work, plus taxis as required. Saved quite a bit of cash over these 15 years. Now we live outside of the major cities a car is a necessity, but we have no plans to buy a new/second had one at this time.

  7. Prairies says:

    Hilux and Ranger top of the sales market. 2 models that give people what they need instead of what they want. You WANT a fancy touch pad stereo and fancy speaker system, you only NEED a radio and a couple speakers. Vehicle standards WANT you to have fancy transmissions for .1% better fuel mileage to make emissions standards happy, you only NEED a 5 speed manual with cheaper replacement parts.

    These vehicles don’t seem to get the same traction in North America and it bugs me.

    • MaryR says:

      Ford stopped making the Ranger until reintroducing it in the last 1 to 2 years, despite the fact that American buyers loved the Ranger for its great mileage (2 wheel drive) and low cost. Ford wanted the much higher profits on the F150, regardless of what consumers wanted.

      It is also shameful that there are NO true low cost vehicles left in the US. I guess we should all go to India to buy what we want for a great price.

  8. David Hall says:

    Australia has not suffered a recession since 1991.

    Auto dealers are not happy about declining auto sales.

  9. Mean Chicken says:

    I’ve noticed new cars have gotten more difficult to service, thus repair costs will be higher and there’s higher chance service won’t be done correctly.

    For instance, I’d never buy an automatic that doesn’t include a $5 dipstick to monitor the fluid condition or a pan that can be removed for fluid and filter changes. Used, or new.

  10. Yak now says:

    Not everyone buys into the notion that every single “safety” gizmo is desirable or necessary. Not everyone wants a vehicle shaped like a blob — it may be fuel efficient, but its ugly. Cars are being designed to meet political goals, ignoring the needs of actual buyers.

    I can buy after market parts for my “old” vehicle. In many instances the parts are as good OR BETTER than the OEM parts. I know all the quirks of my vehicle, no need to buy an ugly lemon.

    And there is no reason to pay ever higher auto property taxes (or registration taxes or whatever label your local government likes to use). Old cars have depreciated to the point the taxman can’t raise assesment value with a straight face.

    Why pay a LOT more, for an ugly vehicle I don’t want, full of politically motivated “features” that I don’t want — all so I can pay higher taxes on a vehicle that will depreciate faster?

    A lot of people are trying to read some macro economic signal out of slowing car sales; I think most if not all of it has to do with the car market itself

  11. max says:

    I had a Panamera I got rid of. That thing cost me about 12k a year or more. It depreciated 600 a month (7200), insurance (1500), maintenance (1-2k) and fuel 3k) I know use uber about 100 a month.

    I guess there are a lot of people starting to think like me.

    I also took my kids out of private school. Another con- you can get teachers online 1:1 for as little as $5 who are great.

    Both those items saved me about 40k a year

  12. Gold is just..gold says:

    NO! I totally reject the notion that Australia is anything but exceptional! Car sales? POOF! Who cares?

    We are one of the few countries that has not, WILL NOT, experience recession, ever.

    The GFC glided over us, like WD40 over a rusted lock, like sun block gilded over a pert bosom. Aah! The memories.. (sadly, more rusted locks than bosoms ..but I digress..)

    At the end of the day, when the chips are down, Aussies will do what- ever it takes. Remember Darwin February, 1942? The great race south, led by the wharfies?

    We can do that again, you know. We haven’t lost it and our fabulous social diversity make us a formidable foe should adversity strike.

    So, a piddling fall in car sales is a pimple on an elephant’s bum. I will keep my 12 yo car for another few years until Elon, the world’s greatest hope, sells me an EV for AUD 20K including a raffle ticket for a chance to go on the first Musk to Mars venture. (I don’t want to come back anyway)

  13. Cashboy says:

    Wolf,

    You may as well start writing an article about massive declining sales of German cars.

    Lots of reasons:
    China
    India

    Brexit worries has had an effect and will have more in the future.

    EC Regulations; nobody is sure what to buy because the EC have not made it clear. Diesel is now a no-no and there are a lot of diesel cars in the EC. Not many charging places for EVs.

  14. Jdog says:

    The standard of living is declining in most of the world, but people do not seem to realize it. Give it another couple of years and we will be knee deep in worldwide recession…..

  15. polistra says:

    Henry Ford would understand the problem. When you aren’t making cars, you aren’t paying workers who can afford to buy cars.

Comments are closed.