It’s a new ute for work and an SUV for the weekend as Australians splurge on fresh wheels after being cooped up during COVID-19.
Almost 80,000 new cars were sold in January (up 11.1 per cent), with cashed-up motorists igniting a ute renaissance after more than two years of falling sales.
Light commercial vehicle sales, which are mostly utes, shot up 24.6 per cent in January as almost 3500 tradespeople started 2021 with new rides.
The large spike marked the third consecutive month of annual increases in new vehicles sales, ending a two-and-a-half-year sales slump, according to Federal Chamber of Automotive Industries figures published on Wednesday.
And it’s not just tradies buying cars. SUV purchases rose 17.4 per cent over the month, with 6161 more units sold by the likes of Toyota, Mazda and Hyundai.
So the ute boom is back and SUV sales are doing well, too.
But what’s driving it?
Commsec chief economist Craig James told The New Daily Australians were cashed up after being cooped up in their homes because of the coronavirus lockdowns.
Money that would have been spent on overseas holidays has instead piled up in bank accounts, creating burning holes in people’s pockets.
“I’m not going to Europe or the US, so why don’t I update my ride and get something a little bit more flash?” Mr James said, mimicking a hypothetical consumer.
“People are also driving their own cars, there’s a degree of caution about the way we travel [post-COVID] … we know public transport demand is way down.”
Mr James said government stimulus had also contributed to the sales spike, with the instant asset write-off making buying cars for commercial purposes much more affordable.
“People are getting back to their jobs and businesses are spending as those dollars come in,” he said.
So, who’s winning? Toyota managed to clear 16,819 new vehicle sales in January, scooping up 21.1 per cent of the market.
Mazda was second, with 8508 sales (10.7 per cent of the market), followed by Hyundai with 5951 (7.5 per cent), Kia with 5500 (6.9 per cent) and Mitsubishi with 5179 (6.5 per cent).
According to data provided to The New Daily by carsales.com.au, SUVs and utes dominated the list of the most searched vehicles in January:
- Ford Ranger
- Toyota Landcruiser
- Toyota Hilux
- Toyota Rav4
- Toyota Landcruiser Prado
- Hyundai i30
- Isuzu D-Max
- Mitsubishi Triton
- Mazda CX-5
- Volkswagen Golf.
But what’s interesting is that new car sales didn’t rise across the board.
Sales of new smaller passenger cars fell 9.3 per cent in January, with 1914 fewer sold this January than last.
Combined with the booming SUV sales, this shows Australians are in the market for larger rides that can move families around in style, according to Mr James.
And this trend is likely to continue for some time, partly because supply issues that plagued the new vehicle market during COVID-19 last year have been resolved.
“It’s been hard [for companies] to get workers in factories, and there’s been shortages of components like semi-conductors,” Mr James said.
“Many of these [new car] orders have been in place for quite some time, [but] they’re only being filled over the last couple of months.”
The sales surge is also being driven entirely by private buyers, who bought 25 per cent more new vehicles in January 2021 than January 2020.
In comparison, sales to business buyers fell 1.3 per cent, sales to government buyers sank 11.2 per cent, and rental deals fell 12.4 per cent.