‘Bargains To Be Had’ For Australian New Car Buyers

Australian automotive software and technology provider Cox Automotive says the new car market will cool, despite the introduction of new brands and an expected oversupply. However, China Inc. will still end up with a record share.

Industry insider and statistics and valuation specialist Cox Automotive Australia predicts more challenging times for the Australian new car market, but also potential bargains to be had.

In its 2025 forecast, Cox predicts a 5% decline in total sales compared to 2024, with a target of around 1.18 million units. That compares to 2024’s record registration total of 1.237 million vehicles.

But what might be bad news for OEM insiders struggling to reach targets may be more palatable for new car buyers, with Cox predicting discounting thanks to oversupply as demand from private and fleet buyers wanes in the face of continuing cost-of-living pressures.

Chinese brands are likely to be the winners, Cox says, with makes such as BYD, MG, and newcomers including Zeekr and Geely expected to snare close to a 20% market share collectively.

“Prospective new car buyers battling cost-of-living pressures can expect more affordable choices in 2025, with incentives and discounting expected to ramp up again this year,” Cox Automotive Australia (CAA)’s 2025 forecast stated.

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“Growing manufacturer inventory and even more intense market competition, coupled with presently slowing household demand for new vehicles, means 2025 will continue to offer up a ‘buyer’s market’ – unlike the supply-constrained ‘seller’s market’ we saw during 2021-2023,” the company said.

“In all likelihood, both private and fleet sales will face headwinds and cool year-on-year in the first half of 2025 in particular, driving the introduction of more incentives at OEM and dealer level to ‘move metal’ – manifesting as discounts or lower finance interest rates,” it stated.

Despite pressure for car makers to move vehicles in the first months of 2025 – including vehicles imported early to meet the new Vehicle Efficiency Standard regulations, which came into force on 1 January – Cox expects the first half of 2025 to echo the majority of 2024 in terms of soft private sales.

“Private vehicle sales – meaning any non-business, government or rental fleet purchase – decreased a substantial 8.0% across H2 2024, and CAA expects the structural factors driving this to linger into the first half of 2025 at least,” it stated.

“Other factors that could impact non-private sales in 2025 include a predicted slowdown in the private investment pipeline, and the predicted short-term impact in the lead up to the Federal Election.”

Cox does predict better fortunes for electrified vehicles – both hybrid and battery electric. It expects battery electric vehicles to grow from under 7% share to around 10% while electrified vehicles overall (battery electric, plug-in hybrids and hybrids) should grab around 30% of the total market.

Cox calls out the end of fringe benefits tax concessions for leased PHEVS as a potential hurdle in their growth, but cites the arrival of plug-in utes such as the BYD Shark, Ford Ranger PHEV and commercial newcomers, including plug-ins from GWM, as the counterpoint.

“As cost-of-living pressures continue to impact the private market, and with supply no longer an overarching problem, you can expect to see an even harder-fought sector in 2025, with keener pricing and finance options a likely result for private and fleet buyers,” said Cox Automotive Australia CEO Stephen Lester.

If you can afford to buy a new car, do it soon – and to maximise your saving make sure it’s a car that is sitting in dealer stock.

This is especially true if the car is at the ‘dirtier’ end of the emissions spectrum. The likelihood is that later in 2025 and into 2026, diesel utes and SUVs will get more expensive as the penalties related to not meeting the New Vehicle Efficiency Standard start to impact new car brands.

• More cars from China – not just new brands, but a wider range of models from brands already in the market…
• Interest rates – the Reserve Bank’s decisions to cut rates may free up our discretionary spending and boost demand.
• The Pacific peso – the Aussie dollar shows every likelihood of taking a hit. That will eventually push car prices up.
• Vote for Me – on past performance, a Federal Election in April or May will stop corporate and government sales. That means more cars for fewer buyers and corresponding price decreases, especially as the end of the financial year (EOFY) approaches.
• More Aussies – a jump of 1 million people in less than two years (in part due to post-pandemic overseas migration) may offset some decreases in demand.