The car market has been a rollercoaster of highs and lows, and for those over 50, understanding the trends is crucial, especially when considering the value and longevity of your vehicles.
In 2024, Australia reportedly saw a record year in car sales with over 1.2 million vehicles finding their way into the hands of eager customers. However, as we shift gears into 2025, the road ahead appears uncertain, with potential bumps caused by rising costs, increasing interest rates, and the introduction of new government regulations like the New Vehicle Efficiency Standard (NVES).
But while record-breaking, the increase in car sales in 2024 was marginal at just 0.3 per cent over the previous year.
Tony Weber, the chief executive of the Federal Chamber of Automotive Industries (FCAI), highlighted a worrying trend as the industry’s momentum began to wane, saying, ‘The second half of the year showed a concerning trend with sales in the private segment falling to very low levels as interest rates and general cost of living pressures impacted Australian families.’
He pointed out that consumer priorities are evolving, with a growing number of buyers considering their environmental footprint and the total cost of ownership associated with low-emission technologies.
However, the uptake of electric vehicles (EVs) hasn’t accelerated as quickly as anticipated, and sales have fallen short of expectations.
Meanwhile, Mike Costello, corporate affairs manager at Cox Automotive Australia, noted that despite the slowdown, the overall volume of car sales finished slightly up in 2023.
‘It’s safe to say this wasn’t entirely forecast by many in the industry,’ he said, pertaining to the increased range of EV models launched last year.
Although hybrid and plug-in vehicles (PHEVs) have become more popular, accounting for 14.1 per cent and 1.9 per cent of the market, respectively, Costello thinks this change is the result of consumers being more cautious about these vehicle models.
Costello also noted the Australians’ love for big 4x4s and utes, adding, ‘neither of which is particularly conducive to full electrification with current technology and infrastructure,’ so hybrids have become a middle ground for buyers wanting to ‘reduce fuel bills’ without having to drastically change their driving habits.
Despite the challenges, he said that new PHEV models from Ford, BYD, and GWM, particularly utes, are expected to drive volume, albeit slower because ‘we are not yet at the point where every consumer is convinced.’
Costello adds that the NVES, which came into effect on January 1, 2025, is poised to be a significant hurdle this year as brands heavily reliant on large SUVs and Light Commercial Vehicles (LCVs) will face pressure if they can’t balance their offerings with lower-emissions vehicles.
This could reportedly lead to hefty penalties for manufacturers and, consequently, higher prices for new vehicles for consumers.
For consumers though, the NVES will help ‘save you money at the bowser, give you more choice of new cars that are fuel-efficient, low or zero emissions, [and] reduce transport emissions, improving the air that you and your family breathe,’ according to the Department of Infrastructure, Transport, Regional Development, Communication and the Arts (DITRDCA).
The industry is responding to the NVES by increasing the ‘range of zero and low-emission vehicles’ available.
With the added competition, regulatory pressure, and cost of living concerns, the market could soften further in 2025. The first half of 2024 was strong, but the second half showed signs of what we might expect moving forward: growing inventory, more discounts, and cooling sales.
This could mean good news for consumers in the form of discounts and cooling sales, but it also raises questions about the future value of their vehicles.
As we navigate this volatile market, it’s essential to stay informed and consider how these trends could impact the long-term value of our cars. Whether you’re in the market for a new vehicle or holding onto your current one, understanding these dynamics is key to making informed decisions that protect your investment.
So, our YourLifeChoices readers, how do you feel about the current state of the car market? Are you considering an electric or hybrid vehicle, or are you sticking with your traditional vehicles for the time being?
Share your thoughts in the comments below, and let’s discuss how we can navigate these changing tides together.
I own an MG4 electric purchased new last year for $29,000 on special. Came with a full ten year warranty. Most fun car to drive I have ever owned and costs very little to run if you charge at home.
Kept my diesel Pajero for the odd very long trip and for towing, although not needed much and last filled the fuel tank four months ago.
Don’t be put off buying electric by scare stories. Insurance premiums are the same as for any vehicle of similar value and registration is about what you pay for a typical 4 cylinder vehicle. Also they do not catch fire any more than petrol vehicles do.
What they do is outperform almost any other vehicle on the road and save you a lot of money in fuel and servicing costs.