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FIRST quarter data on Australia’s automotive market is painting a different picture to previous quarters as used stock tightens, new-car sales rise and prices of used vehicles – especially those aged four years and older – strengthen.

The Cox Automotive Australia Quarterly Market Insights Report, just released, presents a different sales environment for new and used buyers and sellers as compared with the past few years.

It shows that the first quarter dealer used car volume was up 10.8 per cent on the same period in 2023, and that auction sales at Manheim are up 29.8 per cent year-to-date while auction prices remain stable.

Cox Automotive Australia’s Used Vehicle Price Index is also now at 136.5, up from 134 at the start of 2024. That is a 36.5 per cent increase in used prices over four years, but down from a 148.1 peak in August 2022 when new-vehicle shortages were at their worst.

Used passenger car prices are up 46.9 per cent compared with the pre-COVID period of 2019 as ongoing demand is still held back by slow supply, the report said.

“Older cars are maintaining more inflated prices, likely driven in large part by increased demand for cheaper vehicles in line with household spending pressures.”

It said prices were more inflated over 2019 levels for vehicles aged two-to-four years than those aged less than two years “and higher again for those aged five to seven years”.

Cox Automotive Australia CEO Stephen Lester notes in the quarterly report that clarity has returned to the market in the first quarter with good sales in new and used retail markets “as well as growth of almost 30 per cent for our Manheim wholesale auction volume.”

“Prices across the retail and wholesale used markets look to have stabilised after 12 months of declines post-COVID, giving buyers and sellers clarity,” he said.

Stephen Lester

He said that retail dealer used inventories were about 5 per cent lower than the end of 2023 compared with sales growth of about 11 per cent “which means lower supply.”

He also said that four-in-10 dealer-used cars were still discounted before selling, down by an average of 6.7 per cent.

“We also note that average selling days for used dealers is down 3.1 per cent year-on-year to 41 days and the average dealer discount has reduced very slightly from 7.0 per cent to 6.7 per cent per vehicle.”

He expects passenger cars will hold more inflated price indexes than SUVs or utes, and that the small sample size of EVs will continue to “generate volatility.”

The sales of new SUVs and utes may be strong but on the used market it is passenger cars and hatchbacks that have the buyers’ attention, while utes slide. The active used car listings on Cox Automotive Australia’s quarterly report shows the Ford Ranger at the top with 3819 listings in the March quarter (up 2.4 per cent) while the Corolla was up 0.8 per cent and the Hilux was down 0.3 per cent.

Mr Lester also continues to see inflated price indexes in older vehicles – five years and older – whether in the retail or wholesale market – as strengthening new-vehicle flow puts downward pressure on late-model stock, including dealer demonstrators.

“We are additionally seeing more activity in our older-vehicle clearance lanes at Manheim auctions.”

His outlook was for stable used vehicle prices but factors that could affect this included the ability of new-vehicle sales to continue their record run in the past quarter.

By Neil Dowling

AdTorque Edge