SUVs Drive Australian New-Vehicle Demand

Australia’s new-vehicle sales rose 4.6% year-on-year in August to 94,909 units, driven by demand for SUVs and light commercials.

The result left year-to-date sales up 3% at 784,380, the Federal Chamber of Automotive Industries says.

August SUV deliveries rose 10.6% to 36,396 units, while LCV sales climbed 126.2% to 16,733. Car sales fell 4.2% to 38,945 for the month, leaving year-to-date deliveries down 5.5% to 324,127.

“While passenger motor vehicles continue to lead the market in terms of overall volume with 41.3% of total 2016 sales, the quite discernible trend towards SUVs and light commercials continues,” FCAI CEO Tony Weber says in a statement.

SUVS now account for 37.3% of total year-to-date sales, up from 34.8% year-ago.

After eight months, new car sales are off 5.5% to 324,127 units, while SUV deliveries are ahead 10.3% at 292,606 and LCV deliveries up 10.4% at 146,440.

“With LCVs the current market share year to date is 18.7% compared to 17.4% in 2015,” Weber points out.

August also saw strong growth in business sales, with deliveries up 21.5% year-on-year. LCV deliveries to business customers jumped 34.4% and SUVs rose 31.2%.

The Toyota Corolla was the highest-selling model in August with 3,554 units, followed by the Toyota HiLux (3,311) Ford Ranger (2,964), Mazda3 (2,818) and Toyota Camry (2,458).

Toyota was market leader in August with 18,650 units, followed by Mazda (9,258) and GM Holden (7,667).

Toyota leads the year-to-date results with 138,459 units for a 17.7% market share. Mazda follows with 78,691 units (10.0%), with Hyundai at 68,489 (8.7%) GM Holden at 62,748 (8.0%) and Ford at 54,126 (6.9%).

Toyota’s result was its best August in nine years. It was the second consecutive month in which Toyota sold more than twice as many new vehicles than any other brand.

“Toyota's SUV sales were remarkably strong, gaining 43.6% with outstanding demand from families and businesses, particularly for Prado, LandCruiser and RAV4,” Toyota Australia Sales and Marketing Executive Director Tony Cramb says in a statement.

Mazda’s utility range had its biggest August ever, with combined sales of the Mazda CX-5, Mazda CX-3 and Mazda CX-9 reaching 3,963 units to pass the previous August benchmark of 3,824 set last year.

Year-to-date, Mazda sales are up 10%, and the company says it’s on pace to beat its 2015 record of 114,024 units.

Mitsubishi Australia claimed an August import sales record off the back of a bumper SUV market as its deliveries rose 10.1% to 6,136 units.

“Our SUV sales continue to go from strength-to-strength in a market that is making a long-term shift from passenger cars to SUVs,” Mitsubishi Australia Marketing Executive Director Tony Principe says in a statement.

The Australian rush to SUVs is confirmed by market pollster Roy Morgan Research, which finds 885,000 Australians intend to buy an SUV in the next four years – up nearly 20% from year-ago.

But while the appetite for SUVs continues to grow, bigger is no longer best.

Medium SUVs now are more popular than large SUVs among new-car buyers, Roy Morgan Research says, with the Mazda CX-5, Toyota RAV4 and the new, upsized third-generation Hyundai Tucson the big winners.

The company says its data indicates 2,331,000 Australians intend to buy a new vehicle in the next four years. This includes 634,000 buyers with a more urgent desire to take the keys within the next 12 months.

Among brands that look to benefit most from the rising purchase intentions over the next four years are Toyota (the make of choice for an additional 70,000 intenders compared with a year ago), Hyundai (up 37,000), Mitsubishi (up 28,000), Nissan (up 27,000) and BMW (up 24,000), Roy Morgan Automotive Industry Director Jordan Pakes says.

“Car-buying intentions have continued to improve with 11.8% of the population intending to buy a new car in the next four years, equating to 2.33 million people,” Pakes says in a statement.

“Total SUV intentions are driving much of the recent growth, with 885,000 people looking to buy an SUV in the next four years – an increase of 142,000 compared with July last year.”

Those in the market for a medium SUV – less than A$60,000 ($45,472) – have increased by 64,000 to 286,000, Pakes adds. “This segment has now moved ahead of large SUV – at more than A$70,000 ($53,053) – as the most intended SUV segment.”

Within the medium-SUV segment, the Mazda CX-5 leads the way with 71,000 potential buyers, up 15,000 over the last 12 months, while the Toyota RAV4 has closed the gap with an additional 20,000 Australians looking to buy a RAV4 compared to July 2015.

“The other big segment mover over the last 12 months was the recently launched Hyundai Tucson – with 20,000 people looking to buy one in the next four years,” Pakes says.

The rush to salesrooms comes as the FCAI touts an investigative report published in the U.K.’s Auto Express, the online arm of the U.K.’s biggest-selling motoring weekly, confirming Australian cars are among the most affordable in the world.

The Auto Express report looked at a range of facets about car ownership in 11 countries, including the U.K., Japan, United Arab Emirates, Germany, Russia, South Africa, the U.S., Venezuela, India and Brazil.

Australia had the third-lowest prices, behind India and Russia.