Earlier today the ABS released its new motor vehicle sales report for April.
It was an unremarkable report on first glance. Sales fell by 1.5% from March, leaving total sales from a year earlier up 2.8%.
However, when you dig into the report, it reveals a dramatic shift in the composition of Australian vehicle purchases.
Here’s a chart that looks at the composition of total new vehicle sales going back to April 1995.
Clearly demand for passenger vehicles – albeit still the largest component of total sales – has been sliding over the past two decades. 20 years ago they made up 76% of all sales, today that has fallen to just 43%. On the other hand, sales of sports utility vehicles (SUVs) have exploded, rising from 7% to 36% over the same time period.
While passenger vehicle sales still make up the largest proportion of all sales, given the annual growth rates by vehicle component shown below, it seems almost inevitable that SUV sales will soon take up that mantle.
While local auto manufacturers failed to adapt to this trend, something that partially explains the sector’s demise, don’t be surprised to see more foreign-made SUV’s on Australia’s roads in the years ahead.