Market booms as car buyers embrace fuel efficient cars

Australian consumers seem unperturbed by cost of living pressures, buying an all-time record number of vehicles last month. See the top models being bought.

Australians bought a record number of new cars last month, flocking to hybrid and electric vehicles in a bid to avoid high fuel prices.

New-car sales were up 13 per cent to 304,452 in the first quarter of this year, a stunning result given that last year was an all-time record for the industry.

Nine of the past 12 months have produced record sales results, as supply improves and the industry satisfies pent-up buyer demand.

Sales of electric vehicles and hybrids accounted for almost a quarter of passenger vehicle sales in March, led by the Toyota RAV4 Hybrid and the Tesla Model Y, which were second and third on the sales charts behind the Ford Ranger ute.

Toyota is starting to clear a huge backlog of orders for the Toyota RAV4 Hybrid. Picture: Supplied.

Toyota’s HiLux, the number one seller for seven of the past eight years, was relegated to fourth place.

Federal Chamber of Automotive Industries (FCAI) chief executive Tony Weber said the result was “remarkable” but warned that economic headwinds could eventually catch up with the car industry.

“This is a terrific result for the sector however, all car brands are well aware that these results cannot be taken for granted,” Mr Weber said.

“We need to factor in the ongoing cost of living pressures and the challenges for industry and consumers that will emerge with the introduction of the New Vehicle Efficiency Standard (NVES) in less than nine months.”

The FCAI is concerned that the Federal Government’s fuel standard will drive up prices of utes. Picture: Mark Bean.

The NVES, which will penalise manufacturers for selling thirsty vehicles such as utes and SUVs, was introduced into parliament last week and should be passed in May.

The FCAI was a vocal critic of the standard, arguing that it could add thousands of dollars to the price of workhorse utes, which are the country’s most popular vehicles.

“A fuel efficiency standard is long overdue. However, we remain concerned at the speed and magnitude of the change for both manufacturers and more importantly, consumers,” Mr Weber said.

The FCAI was controversially left out of final discussions and the announcement of the NVES by Climate Change and Energy Minister Chris Bowen, who was incensed by the chamber’s criticism of the standard.

Mr Weber said it would take the industry time to develop fuel-efficient utes and SUVs that complied with the new standards but also met “expectations in terms of price, performance and emissions”.

EV sales were strong in March, led by Tesla’s top-selling Model Y. Picture: Mark Bean.

EV sales continued to grow strongly in March, up 46.4 per cent on the corresponding month last year. If sales continue at their current pace, more than 100,000 will be sold this year. They made up 9.5 per cent of the market last month, compared with 6.8 per cent in March 2023.

But hybrids proved even more popular. Sales almost tripled over last March and doubled in the first quarter of the year, as market leader Toyota improved supply of its top-selling RAV4 Hybrid.

Waiting lists for the RAV4 Hybrid have stretched out well past 12 months for the past couple of years.

Ford is enjoying a resurgence on the back of the top-selling Ranger ute. Picture: Mark Bean

The success of the RAV4 Hybrid has encouraged other brands to introduce rivals. Kia, Hyundai, Nissan and Honda have all launched hybrid SUVs in the past 12 months.

Mr Weber said the growth in EV sales would need to be matched by investment in “critical” recharging infrastructure.

Toyota was the market leader in March, followed by Mazda and Ford, which is enjoying a resurgence on the back of the Ranger and its four-wheel-drive wagon offshoot, the Everest.

Not all manufacturers are enjoying the sales boom, though.

Mazda and Subaru sales are down for the quarter, while all four of the leading luxury brands experienced drops in March.