AAAA Aftermarket Dashboard - Q1 2024

Dashboard Q1 2024

The voice of the independent aftermarket in Australia

Welcome to the Q1 2024 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 is sourced from VFACTS New Car Sales Data, Fifth Quadrant Fleet Insights Program, Australian Institute of Petroleum, Roy Morgan & Westpac

State of the Market

Australian Economic Indicators

Consumer Confidence Business Confidence Fuel Prices

83.8 ( 2.5)

Westpac Melbourne Institute (Q1’ 24, vs. Q4’ 23)

Consumer confidence has seen a slight uptick at the beginning of 2024, reaching a 20-month high in February. This increase was fueled by growing positivity towards major purchases and expectations for the year ahead, supported by factors such as cooling inflation rates, a more optimistic outlook for interest rates, and the beneficial effects of adjusted Stage 3 tax cuts.

Despite this positive trend, there remains however a sense of caution among Australian consumers when it comes to the country’s near-term economic prospects.

97.6 ( 8.5)

Roy Morgan (Q1’ 24, vs. Q4’ 23)

Business confidence recorded a significant increase through the first quarter of 2024, off the back of Australian businesses feeling more confident about investing in growing their business. This was driven by a particularly strong February result, which reached a record high of 101.5, and was the first time the monthly result had been in positive territory since January 2023 (106.4).

The index did however dip back into negative territory in March (98.0), largely due to businesses becoming slightly less confident in the Australian economy over the short and medium term.

$1.93 ( 3.7c)

AiP - Ave weekly price (Q1’ 24, vs. Q4’ 23)

Petrol prices have witnessed a slight decline at the beginning of the year, following their peak of nearly $2 towards the end of 2023. Despite this, Australia’s reliance on imported petroleum products means that several factors (e.g. global demand fluctuations and volatile exchange rates) persist in keeping pump prices near record highs.

Looking ahead to the remainder of 2024, predicting petrol prices remains challenging. Australians would however be hopeful of seeing further decreases in pump prices amidst the worsening cost of living crisis.

New Vehicle Sales by Quarter

We’ve seen an excellent start to the year, with 304,452 new vehicles sold through the first three months of 2024. This is the best first quarter in Australian history, and the only one that has recorded over 300,000 sales. This is primarily driven by a further surge in SUV sales, with the category growing by 16% year-on-year, while other vehicle segments remained stagnant or experienced moderate declines.

Looking forward, if this upward trend persists, we anticipate another recordbreaking year in vehicle sales. With that said, we do expect momentum to slow down to a certain extent through the year as manufacturers fill the remaining order backlog, and vehicle supply in dealerships moves back into surplus. 304,452

New Vehicle Sales By Marque

Source: VFACTS 2024 | Passenger, SUV, Light Commercial & Heavy Commercial

Toyota has started the year strongly, growing a massive 37% YoY as outstanding orders are fulfilled. Given it is one of a few brands still holding a substantial backlog, Toyota is expected to have another strong year in 2024.

Looking at the rest of the top 10:

▪ Despite being the only brand to record a YoY decline, Mazda held strong to retain 2nd, narrowly edging out Ford in 3rd .

▪ Nissan had arguably the most impressive quarter, climbing five spots into 7th off the back of a 70% YoY increase.

▪ Mitsubishi (up 21%) and Isuzu Ute (up 24%) were also strong performers, climbing 2 spots each due to YoY growth.

▪ MG recorded a weaker start to the year as it waits for new models to land, dropping 3 spots to round out the top 10.

EV Sales & Growth

Passenger / LCV Sales By Fuel Type

Source: VFACTS 2024 | Passenger, SUV, Light Commercial & Heavy Commercial

Volume: 136,541

Change YoY: -2%

Share: 45%

Volume: 103,812

Change YoY: 10%

Share: 34%

Volume: 35,203

Change YoY: 119%

Share: 12%

Volume: 25,468

Change YoY: 46%

Share: 8%

Volume: 3,426

Change YoY: 134%

Share: 1% Total EV Sales

The first quarter of 2024 saw a further notable uptick in sales of low and zero emission vehicles across Australia. Battery electric, plug-in hybrid, and hybrid vehicles all exhibited robust year-on-year growth during this period.

Sales of battery electric vehicles are up almost 50%, with more than 25,000 units sold in the first three months of the year. This lags hybrid sales however, which have more than doubled compared to the same period in 2023.

In stark contrast, total petrol sales are down 2% year on year, with nominal growth in SUVs and Light Commercial vehicles unable to overcome the move away from petrol in passenger vehicles. Diesel is similarly experiencing significant declines in Passenger vehicles, but has to date still been able to offset these by its strong performance in Light Commercial vehicles and SUVs.

Scheduled Servicing & Tyre Repair

Where would you typically take your fleet vehicles for…?

The Fifth Quadrant Fleet Insights program provides workshops with valuable insights into fleet vehicle servicing and maintenance trends, helping them understand the role they play in servicing business vehicles.

The main shift in 2024 is a notable decline in fleet owners' reliance on aftermarket shops for tyre replacement and repair, a category they historically dominated. This is likely a reflection of dealership’s pushing into this space more aggressively in response to reductions in other revenue streams.

Despite this, the aftermarket still maintains over 50% market share in each fleet servicing and maintenance category, showcasing its continued strength.

Fleet Satisfaction with Aftermarket Workshops

How satisfied are you with the aftermarket workshop that looks after your…?

Extremely Satisfied (9-10)

Moderately Satisfied (7-8)

Dissatisfied (0-6)

The Fifth Quadrant Fleet Insights program also measures fleet managers’ satisfaction with the workshops responsible for servicing and maintaining their fleets. These have fluctuated significantly over the past six years, with a significant decline evident in 2022 as businesses dealt with the impact of COVID-related shutdowns and service disruptions.

The latest results show that this was likely a reflection of the broader challenges facing businesses at that point in time. The 2024 numbers have regained much of the lost ground, with almost nine in ten businesses satisfaction with the workshop responsible for their fleet’s scheduled servicing and maintenance work.

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, Fifth Quadrant 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: Lesley Yates Director of Government Relations and Advocacy Australian Automotive Aftermarket Association (AAAA) Convenor: Automotive Products Manufacturers & Exporters Council (APMEC) 7-8 Bastow Place Mulgrave VIC 3170 Australia

+61 (3) 9545 3333 | 0402 005 476

For more information, please contact: Ben Selwyn Matthew Beatty Director Account Manager Fifth Quadrant Fifth Quadrant 0411 132 166 0467 243 525

ben@fifthquadrant.com.au mbeatty@fifthquadrant.com.au

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