Current Trends in Australia’s Used Motor Vehicle Market

Tuesday, 09 August 2022 | Mackenzie Haskins

Australia’s used car industry is undergoing a series of seismic changes. The two major reasons for fluctuations of the market; are consumer behaviour and global supply issues. Various external economic and societal factors promise further movements in Australia’s car market.

Household expenditure in Australia has changed, largely due to the COVID-19 pandemic. Post-pandemic inflation has altered the average Australian households purchasing power. The kinds of vehicles sought after by Australians greatly differs from a few years ago and is unrecognisable when compared to a decade ago.

Fluctuations in Australia’s economy and consumer markets often imitates trends in America. Steep rises in both counties inflation rates indicates similarities between the economies. The rise in popularity of electric vehicles shows similar patterns in consumer behaviour.

In examining America’s far more documented used vehicle industry future movements in Australian markets can be predicted. It is first necessary to examine similarities between the two markets.  

The ten bestselling vehicles in both countries is one such indicator. Last year, the US list included five SUVs, three utes and one small car. Australia’s list included four SUVs, four utes and two small cars. A decade ago, the lists looked entirely different whereas today many of the same vehicles overlap.

Another indicator is the growth in the popularity of electric vehicles in America. Over the last decade, demand for electric vehicles has grown immensely in the US market. An increase in the range of EV manufacturers bolstered this growth.

Despite a lack of infrastructure Australian consumers are also increasingly opting for electric cars. To supplement this demand, a growing number of car manufacturers have begun distributing electric vehicles to Australia. 

Australia’s Used Vehicle Auction Market

Various issues are impacting the supply of new motor vehicles in the western world. The COVID-19 pandemic has caused widespread shipping delays. The current wait time for a new motor vehicle in Australia is 146 days. Consumers are opting for alternatives to avoid the increasing cost of new cars. 

The Manheim Used Vehicle Index shows the increase in auction value of second-hand cars, specifically in the American market. As of July 2022, the index has risen to 221.5, up 13.4% from in June. This year the price index has increased at a monthly average of 11.4%. 

As a result, used car markets have surged in popularity in both America and Australia. This statistic specifically indicates the steadfast growth in specifically online car auctions.

The Manheim index also examines the eight segments of the motor vehicle market. All these segments have grown in value not only in July but this year.  

Full-size, compact, and midsize cars have seen the largest growth in popularity. According to various Australian media outlets compact and mid-size cars remain amongst the most popular. Honda, Suzuki, Mazda and Toyota vehicles are amongst the most mentioned and searched for vehicles according to multiple sources.

This indicates that Australians are opting for practical, fuel efficient and economic vehicles. These manufacturers are likely to continue to grow in popularity as the cost of living continues to surge.

Four-wheel drives have also become popular with soaring prices. Vehicles such as Toyota Landcruiser’s are achieving record prices at auction.

Luxury branded vehicles have taken a big hit in the last few years. According to data from UBS, the number of luxury cars in Australia has increased by 6.6% between 2000 and 2018. Despite this the manufacturers, Audi, BMW and Mercedes Benz have all recorded losses over the last few years.

The cost of petroleum and vehicle parts have also influenced consumer behaviour. Parts specifically for European manufactured cars are becoming increasingly expensive.

An amalgamation of factors has meant luxury vehicles are less sought after, buyers instead opting for used vehicles from trusted sellers. Auction results for European model cars have also depreciated where Toyota and Mazda have experienced growth.­

Australian’s now upgrade their cars after a 1–2-year period. This period is far shorter than it has been in the markets recorded history. With the cost-of-living increasing purchasing new motor vehicles is becoming less feasible for an increasing segment of the market.

The US has witnessed massive growth in popularity of electric vehicles over the past decade. Only a few thousand EV’s were registered across America in 2010. Today over 315,000 are sold annually.

Electric vehicles have likewise risen to the forefront of Australia’s motor vehicle industry. With the federal government’s net zero emissions target, various incentives to switch to EV’s have been implemented.

Due to supply issues, the vast majority of EV’s in Australia are on backorder. Growth is likely to resemble what has happened in America and EV’s will likely become one of the most sought-after vehicles on the used car market.

Transactional marketplaces are also becoming a driver of Australia’s motor vehicle industries. Online auction platforms have experienced

Domains such as cars.allbids.com.au offer a more streamlined and user-friendly platform for buyers. These trusted digital mediums allow buyers a transparent and cost-effective avenue for buying a used motor vehicle.

Some predictions indicate that markets cooling across the board through ­the coming years. Periods of drastic inflation are always precursors to declines but others suggest the market may plateau. The increasing frequency of change in the market factors examined earlier, make predictions difficult and only promise uncertainty.

For a transparent and trustworthy sale of your car visit cars.ALLBIDS.com.au. ALLBIDS has been online since 2003 and has over 185,000 verified users. To have an appraisal on your motor vehicle contact: admin@allbids.com.au.