New passenger motor vehicle sales

IBISWorld forecasts the number of new passenger motor vehicle sales to rise by 2.1% in 2025-26, to total 899,580 vehicle sales. This is largely due to a rebound following a slump in new motor vehicle sales in the previous year. Easing interest rates and a hike in household discretionary incomes in 2025-26 are expected to drive growth in new passenger vehicles. Additionally, despite remaining negative an improvement in consumer confidence over the year is expected to make consumers become more optimistic about their future financial position, prompting some individuals to purchase new vehicles.

The number of new passenger vehicles sales has climbed over the past five years. This rise is largely attributable to growth in the population aged over 18. Even so, volatile economic conditions have restricted consumer purchasing power, weighing on the likelihood of them purchasing a new motor vehicle.

The Australian passenger vehicle manufacturing industry ceased to exist in October 2017, after Holden and Toyota closed their respective domestic production facilities. Three years after Holden ended its production facility, its parent company, GM, retired the Holden Brand in 2021. GM stated high manufacturing costs and a small domestic market in Australia as the reasons for retiring the Holden brand.

A growing portion of consumers have opted for SUVs over the past five years, with sales of these vehicles expected to account for approximately 77% of new passenger motor vehicle sales. This shift in consumer preference is driven by several factors. Many buyers are attracted to the increased interior space, versatility, and higher seating position that SUVs provide, which offer enhanced comfort and safety for families and individuals. However, some consumers have opted to purchase small vehicles, which report lower fuel consumption, due to environmental concerns or to seek fuel cost savings. Furthermore, electric vehicles (EVs) are representing a growing share of new vehicle sales. However, this is still a tiny proportion relative to total vehicle sales, as EVs represent approximately 9.5% of new vehicle sales, according to the Electric Vehicle Council. Overall, IBISWorld forecasts total new passenger motor vehicle sales to rise at a compound annual rate of 3.3% over the five years through 2025-26.