AAAA Dashboard - Q2 2021

DASHBOARD Q2 2021

The voice of the independent aftermarket in Australia Welcome to the Q2 2021 Edition of the Aftermarket Dashboard, a quarterly information service for members of the AAAA. This industry publication captures useful statistical and related data, as indicators of the unfolding trends and health of the automotive aftermarket industry, and has been designed to provide regular insight on our industry.

We value your suggestions for improvement or feedback regarding content.

Data sourced from VFACTS New Car Sales Data, ABS Motor Vehicle Census, ACA Research Consumer Automotive Survey

1.

State of the Market

2.

Recovery in New Vehicle Sales

Australian Automotive Aftermarket Association Dashboard. Presented by ACA Research. Copyright © 2021.

3.

Shared Platforms

4.

Industry Headlines

1. State of the Market

Australian Automotive Aftermarket Association Dashboard. Presented by ACA Research. Copyright © 2021.

Australian Economic Indicators Consumer Confidence

113.0

(27.2)

Westpac Melbourne Institute (Q2’ 21, vs. Q1’ 21) Consumer confidence continued to increase through the 2nd quarter of 2021, ticking up an additional 4 points from the first quarter.

Comparing it to this time last year, (where we saw a high degree of volatility), consumer confidence has regained a level of consistency, while also sitting an average of 27.2 points higher.

Whilst these numbers are a positive sign for consumers, we should note that we can expect them to dip in Q3 off the back of the lockdowns being imposed in June and July.

Fuel Prices

Business Confidence

127.6

(40.3)

Roy Morgan (Q2’ 21, vs. Q1’ 21) Businesses have recorded their highest quarterly level of confidence since 2013. These promising figures suggest that Australia is on a road to recovery, having moved through the worst of the pandemic. Again, drawing a comparison to the same time last year sees business confidence 40 points higher.

Assuming that Australia is able to move back out of lockdown, businesses hold a level of optimism about the next 12 months, with a significant majority expecting to be better off financially at this time next year.

Australian Automotive Aftermarket Association Dashboard. Presented by ACA Research. Copyright © 2021.

$1.42

( 10.3c)

AiP - Ave weekly price (Q2’ 21, vs. Q1’ 21) Fuel prices have continued to rise substantially in Q2 2021 (off the back of increases in international crude oil prices), with the higher prices of March 2021 continuing through the 2nd quarter of the year.

Despite this, demand for domestic travel have continued throughout the quarter, with consumers reallocating spending that might typically have been spent on overseas vacations.

4

New Vehicle Sales by Quarter The second quarter again delivered strong new car sales figures, with more than 300,000 vehicles sold. Whilst this can be attributed to seasonality (EOFY sales activity), the figures outperform those of Q2 2019 – before the onset of the pandemic.

303,820

But these figures don’t tell the whole story. Relative to June last year, YoY growth has ticked up less than a percentage point due to stock shortages and supply chain issues (namely, semi-conductors). Should these supply constraints not have been in place, sales volumes would likely have been higher still. Instead, we will most likely see these spread across the next 12 months as stock levels recover.

2021 sales volume in Q2

+45%

350,000 300,000 250,000 200,000 150,000 100,000 50,000 0

Year-on-Year

285,928 209,054

Q1

Q2

Q3

Q4

Q1

2019 Australian Automotive Aftermarket Association Dashboard. Presented by ACA Research. Copyright © 2021.

Q2

Q3 2020

Q4

Q1

Q2 2021

5

New Vehicle Sales by State The strong sales results are again largely consistent across the country, with double digit YoY growth across all states and territories bar the ACT. Again, low volumes here can largely be attributed to the one-off new vehicle sales spike in Q1 2020 as local residents replaced hail-damaged vehicles.

The main concern here will again be the potential impact of an extended lockdown on the new vehicle marketplace. From an aftermarket perspective, this will however most likely continue the trend we’ve seen through 2020, where consumers and fleets have instead looked to used vehicles, or chosen to retain an existing car.

Q2 Volume

% Chng (YoY)

Q2 Share

New South Wales

96,572

46%

32%

Victoria

78,682

44%

26%

Queensland

66,352

46%

22%

Western Australia

30,237

54%

10%

South Australia

19,264

43%

6%

Tasmania

5,262

67%

2%

Australian Capital Territory

4,628

-1%

2%

Northern Territory

2,823

56%

1%

303,820

+45%

State

TOTAL

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New Vehicle Sales By Marque Q2 Rank

Make 2021

Q2 Volume

% Chng YoY

Q Share

1

Toyota

62,440

31%

21%

2

Mazda

32,831

81%

11%

Ford

22,095

60%

7%

4 1

Kia

20,721

89%

7%

5 1

Mitsubishi

19,632

61%

6%

6 3

Hyundai

19,579

39%

6%

7 1

Isuzu

13,493

79%

4%

8 1

Nissan

11,843

49%

4%

9 1

Volkswagen

11,802

20%

4%

10 2

MG

10,816

346%

4%

TOTAL

303,820

+45%

3

3

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Toyota 62,440 vehicles sold Given their extended period of market leadership, it’s no surprise that Toyota again retains first spot with a 21% market share – almost double that of its closest competitor. Further down the list though, we can see a level of movement, with Mazda (firmly entrenched in 2nd) and Kia (overtaking Mitsubishi and less than 1,400 sales behind Ford) our big movers in the top 5. The competitive nature of the Australian market is again clearly evident, with just 2,516 sales separating 3rd and 6th, and 2,677 separating 7th and 10th.

Despite a marginally lower YoY increase, Ford has also recorded a strong quarter, led by the 4x4 Ranger, which has overtaken the Hilux to be the top selling vehicle of 2021 so far (23,207). As noted last quarter, the Chinese-owned MG also continues to achieve strong growth in the Australian market, with its continued momentum in Q2 leading to 346% YoY growth, and a place in the top 10.

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2. Recovery in New Vehicle Sales

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The New Vehicle Sales Recovery New Vehicle Sales YOY 2020

71,731 79,666

Jan Q1

79,940 83,977

Feb

81,690

Mar

Apr Q2

May Jun

Digging deeper into new vehicle sales, we can see they started 2021 on a positive note, with Q1 ending on a bumper March result. This returned the market to typical pre-pandemic sales volumes, and new vehicle sales then largely maintained this momentum throughout Q2. this stands in stark contrast to the same time last year, when uncertainty around the COVID-19 pandemic was rife and consumers and fleets were unsure of the short and longer term impact of travel and movement restrictions.

2021

100,005

38,926 92,347 59,894

We are not yet out of the woods, with recent lockdowns in NSW, VIC, and SA again introducing significant movement restrictions. Looking ahead however, there are several factors which suggest vehicle sales may be more resilient to setbacks in 2021. The increasing velocity of the vaccine rollout, an increased level of public familiarity with lockdown protocols, and continued demand for local/domestic travel suggest that we are beginning to see light at the end of the tunnel, even if we’re not quite sure when exactly it will arrive.

100,809 110,234 110,664

Source: VFACTS New Vehicle Sales Data Australian Automotive Aftermarket Association Dashboard. Presented by ACA Research. Copyright © 2021.

9

SUVs Gain Further Momentum Passenger cars

LCVs

SUVs 2020

Jan

20,504 18,590

Feb

22,660 19,194

15,542 19,326

Mar

21,783 21,360

May Jun

39,273 42,651

18,165 23,255

9,158 18,064

9,436 21,714

13,839 20,218

14,791 23,177

25,043 23,361

The overall results again do not however tell the whole story.

Through much of 2021 (except when comparing to the severely COVID-impacted April and May 2020 results), monthly sales of passenger vehicles have decreased YOY.

35,383 41,544

14,035 17,485

Apr

2021

28,645 28,550

39,162

51,705

This again demonstrates the changing nature of the Australian car parc, with the recovery in sales largely driven by SUVs. The rise of the SUV is no secret, but consistent monthly sales of ~50,000 vehicles underline their vast appeal, and the ongoing demand for these versatile vehicles.

18,022 49,176 28,649 53,605 51,924 53,761

Source: VFACTS New Vehicle Sales Data Australian Automotive Aftermarket Association Dashboard. Presented by ACA Research. Copyright © 2021.

Month April May June

Passenger +97% +46% -7%

LCV +130% +57% -0.3%

SUV +173% +87% +4%

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3. Shared Platforms

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Top Vehicle Platforms While we’re seeing an ever-increasing range of vehicles coming into the Australian market, we can also see that many of the newer vehicles are likely to be built on common platforms. The upshot is that while there can be significant differences in vehicle design, a level of underlying consistency can save time and money when it comes to building service and maintenance capabilities, whether that is staff familiarity, diagnostic tools or equipment, or parts.

The 57% top 10 most popular vehicle increase platforms account for

Ultimately, the top 20 platforms for new (0-3Y) and relatively new (4-5Y) cars covers over half of the entire car parc, with six of them featuring in the top 10 for vehicles that are both 0-3 and 4-5 years old. As these vehicles enter an age where dealer warranty and capped price servicing come to an end, we can expect to see a lot of vehicles built on these same platforms coming into aftermarket workshops.

% Share of Car Parc by Age

Mazda Skyactiv Platform Ford T6 Platform Toyota TNGA Platform Mitsubishi GS Platform Nissan/Renault CMF-CD Platform Toyota K Platform

44% of cars aged 0-3 years All Others

% Share of Car Parc (0-5Y) PLATFORM

in vehicles 5 – 10 years old

38%

38%

46%

63%

0-3Y 8.0% 4.3% 5.7% 3.7% 2.8% 2.6%

4-5Y 10.5% 5.2% 3.9% 3.5% 2.9% 5.1%

0-5Y 6.7% 3.5% 3.6% 2.7% 2.1% 2.7%

Next 10 Platforms

18%

18% 18%

12%

13% Top 10 Platforms

Source: TecAlliance (1H2020) Australian Automotive Aftermarket Association Dashboard. Presented by ACA Research. Copyright © 2021.

58%

44%

44%

0-3Y

4-5Y

25% OVERALL

36%

31%

6-10Y

10Y+

12

Common Vehicle Platforms It is important to also remember that in many cases, these platforms are not just shared across vehicles of the same make, but are also used across multiple brands.

While this is in some cases a natural byproduct of shared ownership (e.g., VW and Audi), we’re also seeing manufacturers striking alliances to co-develop platforms.

This allows them to optimise their R&D spending, and ultimately means they can bring new vehicles to market faster.

FORD RANGER

Ford T6 Platform (374,198 Vehicles)

261,650 vehicles

From an aftermarket perspective, this again emphasises the opportunity. Understanding the commonly used platforms (particularly among vehicles approaching the end of dealership warranty), can help operators understand how they can better focus their equipment purchases and training.

FORD EVEREST

MAZDA BT50

21,032 vehicles

91,516 vehicles

Hyundai/Kia OS Platform (34,685 Vehicles) HYUNDAI KONA

31,017 vehicles KIA SELTOS

AUDI A3/SPORTBACK

VAG MQB-Platform (188,986 Vehicles)

VW GOLF

SKODA OCTAVIA

3,668 vehicles 25,626 vehicles

117,021 vehicles

Source: TecAlliance (1H2020) Australian Automotive Aftermarket Association Dashboard. Presented by ACA Research. Copyright © 2021.

11,318 vehicles

13

4. Industry Headlines

Australian Automotive Aftermarket Association Dashboard. Presented by ACA Research. Copyright © 2021.

Industry Headlines Pilot program to drive more women into the auto sector Victorian car businesses from mechanics to spare parts outlets will be encouraged to diversify their workplaces under an industry-driven program that hopes to sharply increase the number of women under the bonnets of the state’s vehicles. Women account for just two per cent of automotive sector employees but a Workplace Diversity Project from Tradeswomen Australia will launch in Melbourne on Wednesday, with more than 160 workplaces across Victoria already signed up to participate.

Aussie firm develops world-first wheel alignment system Going into a tyre shop for a wheel alignment or manually tweaking your set-up for optimum performance could soon be a thing of the past thanks to a new ‘active wheel alignment system’ (AWAS) developed by Victorian-based company Doftek. Considered a world-first, Doftek’s new system is claimed to allow for on-the-fly adjustments of wheel camber, caster and toe-in via a three-mode selector switch to cater for varying demands of a particular road and driver.

Mechanics to be retrained for electric vehicles as diesel buses phased out by 2030 The state government is developing short courses to train mechanics to work on electric vehicles as it prepares to phase out diesel buses by 2030.

Sydney will see 50 new electric buses permanently rolled out this year. About 1600 bus drivers and operators will need to be upskilled or retrained as the government plans to transition its 8000 diesel buses to electric.

Dodge Charger police cars to be evaluated for local work Federal police are about to test a new pursuit vehicle widely used by US law enforcement that could be rolled out to state highway patrol fleets.

Specific police-prepared versions of the Dodge Charger are about to undergo evaluation by Australian police with the view to putting the four-door sedan into service.

2020-21 MG 3 hatch recalled in Australia because the petrol tank could detach Almost 4000 examples of Australia’s top-selling city car are being recalled because a bad batch of bolts could cause the fuel tank to detach from the vehicle. The ACCC recall notice says: “The fuel-tank strap retaining bolts may be faulty and could fail, which could result in movement of the vehicle's fuel tank, including it detaching from the vehicle.”

Cupra reveals its plan to launch in Australia Niche European brand Cupra is planning to bridge the gap between mainstream and prestige when it arrives Down Under next year. With an emphasis on design and performance, the Volkswagen-owned newcomer will start with three models, each named after parts of Spain, where the brand has its headquarters.

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15

About AAAA

About ACA Research

The Australian Automotive Aftermarket Association, is the national industry association representing manufacturers, distributors, wholesalers, importers and retailers of automotive parts and accessories, tools and equipment, as well as providers of vehicle service, repair and modification services in Australia.

With over 20 years of automotive experience, ACA Research has developed a detailed understanding of the automotive sector, Using this market knowledge, we design and deliver research that helps our clients understand and overcome their business issues, empowering them to move forward with confidence.

For more information, please contact:

For more information, please contact:

Lesley Yates

Ben Selwyn

Bayee Wang

Director of Government Relations and Advocacy Australian Automotive Aftermarket Association (AAAA) Convenor: Automotive Products Manufacturers & Exporters Council (APMEC)

Director ACA Research 0411 132 166 bselwyn@acaresearch.com.au

Account Manager ACA Research 9927 3347 bwang@acaresearch.com.au

7-8 Bastow Place Mulgrave VIC 3170 Australia +61 (3) 9545 3333 | 0402 005 476 lyates@aaaa.com.au

Level 6, 54 Miller St North Sydney NSW 2060 Australia +61 (2) 9927 3333

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