2023 new-car sales were huge, but 2024 won't be - Here's why this year could be better for buyers

In smashing through the 1.2 million-unit sales barrier the Australian new-vehicle market set a volume record in 2023. And with stock availability for the majority of brands coming back to near pre-COVID levels you might think 2024 will be on track for an even bigger and better result.

But… to quote a reasonably well-known American folk singer, the times they are a changin’.

In the second half of last year many new-car buyers were taking delivery of vehicles ordered twelve, even 18 months prior.

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And even though COVID-19-related supply chain issues are rapidly fading into history, the economic landscape has changed dramatically, with regular interest rate rises through 2023 impacting the cost of new-car finance.

Group Manager, Marketing and Business Development for the Sydney-based, multi-franchise Alto Group, Michael Olek, told CarsGuide stock availability is now close to normal “across the board” with the exception of Toyota where delivery timing for hybrid versions of the Camry, Corolla and RAV4 are still stretching out as far as two years.

Alto represents 10 new-car brands, including Audi, Isuzu Ute, Jaguar, Land Rover, MG, Mitsubishi, Toyota and Volkswagen. And Mr Olek says, “interest rates and the cost of finance has had a huge impact on people upgrading or turning their vehicles over”.

In smashing through the 1.2 million-unit sales barrier the Australian new-vehicle market set a volume record in 2023. (Image: Glen Sullivan)

He cites the example of a car financed at 3.0 to 5.0 per cent two to three years ago, during which time the price for a new version of the same model has risen 20 per cent.

Factor in a current 10 per cent (base) finance rate and the change-over equation is unattractive enough to take a significant number of people out of the purchase cycle. 

Of the recent huge demand for new vehicles, Mr Oled says, “It was never sustainable. We’ve seen a decline in leads and a return to more normal demand and we’re expecting the rest of the year to be quite soft. It will move back to a buyer’s market.”

He notes the record 2023 market’s incremental growth coming mainly from aggressive EV specialists like Tesla and BYD and predicts OEM/factory support for marketing and bonuses will ramp up over the course of this year.

COVID-19-related supply chain issues are rapidly fading into history. (Image: Tom White)

“The OEMs will turn it up this year. It’s great for the consumer,” he said.

The Federal Chamber of Industries (FCAI) is the peak industry body representing vehicle manufacturers, importers and distributors in Australia, and in announcing the record 2023 new car sales result, FCAI Chief Executive, Tony Weber also sounded a note of caution.

"As we celebrate this historic achievement, we recognise that the automotive sector will face challenges in the coming months.

“Cost-of-living pressures and increased interest rates will impact the market, and we anticipate a challenging 2024.”