NEWS that Mazda is discontinuing its Mazda6 sedan and wagon range sees yet another car maker walk further away from the passenger car market in favour of SUVs and the word in our Newsroom is that Mercedes-Benz is going to start stripping passenger cars from its range as well.

Mazda has sold almost 150,000 Mazda6 sedans and wagons since sales began in 2002. Its best sales year was 2005 when it recorded close to 15,000 registrations. Last year it was just 1354 units.

New passenger cars are still in demand. The Toyota Camry sold 15,000 units last year and the BYD Seal did 6393.But there is a feeling in the industry that maybe the OEMs have wound back the availability of passenger cars too much. That there are a great many Australians who still want to own passenger cars and they are now turning to the used car market to get them.

This is throwing up some interesting statistics that suggest that there is a significant cohort of car buyers who may not yet want SUVs. This has implications for used car managers and their stocking choices.

The issue was raised by Cox Automotive Australia in its 2025 Industry Outlook online seminar by director of strategy and marketing Matt McAuley and corporate affairs manager Mike Costello. 

Speaking to GoAutoNews Premium after the conference Mr Costello said the question of whether car companies should make more hatchbacks, sedans or wagons is best answered by the OEMs because they know their customers best. 

He said the landscape has certainly changed and clearly moved against people who still want passenger cars. In 10 years there has been a reduction in the number of different hatchbacks, sedans and wagons on the market from 139 models, to 86 models (VFACTS). 

New Passenger Car market share fell from 47.8 per cent in 2014, to 16.7 per cent in 2024 while SUV market share increased from 31.7 per cent in 2014 to 57 per cent in 2024. 

2025 Industry Outlook online seminar – speakers: director of strategy and marketing Matt McAuley and corporate affairs manager Mike Costello

But reduced supply of passenger cars does not necessarily translate into reduced demand and this is showing up in the used car market. Mr Costello said that customer sentiment for new vehicles has also clearly shifted to SUVs and manufacturers have met the market. But there is an open question as to whether the same degree of sentiment applies to used vehicles

“Our data total inventory of all listed used cars has increased 2.5 per cent over the past 12 months. However, inventory of used passenger cars has declined by 5.0 per cent and if we cast our eyes back further, used passenger car inventory declined 16 per cent between December 2019 and December 2024.

“The big question is whether customer demand for second hand passenger cars declined to the same degree?

“The percentage of total used car sales that were Passenger Cars has fallen from about 40 per cent to 30 per cent in the past five years. So the new market is definitely impacting the used one. 

“But here’s a key point: While sales of NEW passenger cars in 2024 accounted for 16.7 per cent of sales, passenger cars accounted for 30.1 per cent of the USED market; roughly double.

Mike Costello

“There is a gap between current demand for used passenger cars and new ones.”

Mr Costello said that the data supports this.

“Used passenger cars have more inflated Price Indexes than used SUVs. The average selling price of a used passenger car is up 37.5 per cent in the past five years, whereas an average used SUV is up 20.7 per cent.”

He said Price Indexes are a good way to map prices over time, but another way to measure is to compare residual values (RV%), meaning what percentage of a car’s original RRP was recouped at selling time. 

“In dealerships the average RV% of a 2-4 year old passenger car is currently 79.2 per cent, compared to 75.8 per cent for SUVs in the same age bracket. Passenger cars seem to be holding superior residual values too. A small but meaningful difference. 

Matt McAuley

“Another thing to consider is, the reduced choice in new passenger cars coincides with increased prices due to the removal of entry level spec grades.“If a given passenger hatch model now starts at $30,000 and used to start at $20,000, then of course late-model used versions will have more incentives to fetch strong selling prices and good residual values.

“If we turn away from dealer used cars and pivot to wholesale Manheim auctions, we also see some similar patterns emerging. 

The asset Price Index at auction for passenger cars is up 41.7 per cent in the last five years (141.7), whereas the average Price Index for SUVs at auction is up 26.5 per cent. 

“Fascinatingly, passenger cars have the shortest average selling days at auction, selling on average six days faster than SUVs. Dealer and private buyers.”