Southern Cross Dealership Report - Episode 5

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Used Car Market Shows Remarkable Resilience with 14.8% Sales Surge

The March Automotive Insights Report published by the AADA and Autograb has revealed a significant jump in used car sales for the third consecutive month, rising by 14.8% to 200,566 units sold. This growth comes despite a 4.7% drop in listings, suggesting sellers are moving stock more efficiently.

"This month's results show the resilience of the used car market," said AADA CEO James Voortman. "Sales rose for the third consecutive month and there was a noticeable drop in listings, suggesting dealers and private sellers moved vehicles more quickly and efficiently."

The average days to sell climbed to 51.3 days, the highest figure since November 2023, indicating buyers are taking longer to make decisions in a tightening market. State-level growth was led by the ACT (+24.6%), closely followed by New South Wales (+19.3%) and Victoria (+17.0%).

SUVs continue to dominate as the most popular vehicle type, with hybrids experiencing the largest increase in sales this month. The Ford Ranger retained its position as Australia's top-selling used car for the 19th consecutive month, while Toyota held five of the top ten spots. The Suzuki Jimny continued its remarkable performance in retained value, hitting an impressive 114%.

EV Market Developments: Mixed Signals

Electric vehicle sales rose 11.6% with 2,384 units, despite a 3.5% drop in listings. Meanwhile, plug-in hybrid electric vehicles (PHEVs) saw sales increase by 5.2%, which may be attributed to last-minute purchases before the end of the Fringe Benefits Tax exemption on March 31.

In the lead-up to the 2025 federal election, the Coalition has announced plans to repeal Labor's Fringe Benefits Tax exemption for electric vehicles if elected. This policy shift comes shortly after Opposition Leader Peter Dutton had indicated the exemption would remain, prompting discussions about the Coalition's stance on EV incentives. The Coalition argues that removing the exemption would save $3 billion over the forward estimates and labels the subsidy as "wasteful spending."

Luxury Car Tax Under Renewed Scrutiny

With widespread tariffs under the Trump administration, Australia's Luxury Car Tax (LCT), introduced in the early 2000s, has come under the spotlight as more mainstream models fall under its scope due to rising prices. It also negatively impacts trade relations, especially with the EU, which has been disproportionately affected by the LCT.

Kristian Appelt, Director of Iron Chef Imports, stated, "If we are to get serious about reaping the benefits of free trade, scrapping LCT would be a good start." The AADA has continued to argue the tax is outdated, with no local manufacturing to protect, and it effectively discourages the uptake of newer, safer, and more efficient vehicles or features for fear of pushing vehicle prices over the threshold.

EV Repair Skill Gap Creates Bottlenecks

As electric vehicle ownership grows in Australia, the skill gap in the automotive industry is becoming increasingly apparent. After purchasing his new Kia EV5, Matthew Jones encountered a high-voltage fault, exposing long delays facing EV owners for repair work due to a shortage of qualified technicians.

Industry groups warn that without appropriate measures to upskill existing technicians to work on EVs, owners will continue to face long wait times and insurers may write off vehicles that could otherwise be repaired. NSW Fair Trading is consulting on occupational licensing requirements expected to create new categories for light and heavy electric vehicle repairs, which could potentially worsen the repair pipeline bottleneck.

Workplace Charging Infrastructure Lacking

A recent survey by the Electric Vehicle Council of over 1,500 EV owners in Australia found that fewer than one-in-three electric vehicle drivers can access a charger at work. The EVC states that this research highlights the need for governments to provide an exemption for workplace charging from fringe benefits tax and offer funding to encourage workplaces to install more charging infrastructure.

Industry News and Notable Developments

  • Stellantis Appointment: Stellantis has appointed Mike Tsesmelis as managing director for Australia and New Zealand, who will lead local growth initiatives and oversee operations for their multiple brands, including the upcoming Leapmotor launch.

  • Western Carmakers in China: Western carmakers are adopting "in China for China" strategies by collaborating with local R&D teams and technology partners, including Alibaba and Huawei, to launch new software and intelligence capabilities addressing consumer demand for affordable, tech-packed EVs.

  • Dealer Excellence Awards: Toyota WA celebrated the outstanding achievements of its dealer network at the 2024 Excellence Awards, with major awards going to Mandurah Toyota, Pilbara Toyota, and Manjimup Toyota. Similarly, Volkswagen recognized Leichhardt Volkswagen in NSW as the top performer at its 2024 Dealer of the Year Awards, taking home three awards.

  • Tesla Financial Performance: Tesla reported a 66% drop in operational income for the first quarter of 2025, driven by a 13% decline in global sales. Despite this sharp drop, stock prices jumped by 5% overnight, partly attributed to Elon Musk's announcement that he would scale back his commitments in Washington.

  • ACCC Action Against LDV Importer: Australia's consumer watchdog has launched Federal Court proceedings against Ateco Automotive, the importer of Chinese brand LDV, over "misleading" claims surrounding the off-road capability of the T60 ute and G10 van, affecting more than 5,000 customers.

Product Spotlight: Supercharged Suzuki Jimny

Harrop Engineering has quietly introduced a supercharger upgrade for the Suzuki Jimny, offering an impressive 59% gain in peak power and 42% increase in peak torque. The TVS900 kit, priced at $10,990 installed, transforms the already capable off-roader with a water-to-air intercooled system that provides instantaneous boost response. For enthusiasts who found the standard Jimny's 75kW output lacking, the upgrade to 106kW and 168Nm makes a substantial difference, reducing the 0-100km/h time from 12.9 seconds to 10.1 seconds.

New Model Updates

Several major manufacturers have announced new and updated models:

  • Volkswagen Tiguan: Starting from $44,990 plus on-road costs, the new Tiguan will arrive next month with comprehensive standard features including 19-inch alloy wheels, a 12.9-inch media system, and advanced safety technology.

  • Kia Tasman: Kia has announced pricing for its highly anticipated Tasman dual-cab utility, with the 24-variant range starting from $42,990 before on-road costs for the 2WD version, competing directly with segment leaders like the Ford Ranger and Toyota HiLux.

  • GMC Yukon Denali: GMSV has begun right-hand drive conversion of its GMC Yukon Denali, priced from $174,990 plus on-road costs (up $5,000 from the originally announced price), featuring a 6.2-liter V8 petrol engine and a braked towing capacity of 3,628kg.

  • Toyota LandCruiser 300 Series: Toyota Australia has announced model year updates to its LandCruiser 300 Series range comprising upgraded safety technology, infotainment systems, and new comfort features, with prices increasing by between $999 and $2,029.

  • GWM Cannon: GWM has expanded its light commercial utility range with additional body styles, powertrain alternatives, and the introduction of an entry-level Premium grade.

Looking Ahead

As the industry continues to navigate complex market conditions, dealers should remain vigilant about inventory management and pricing strategies. The mixed signals in the EV market, particularly following policy changes around FBT exemptions, warrant close attention. The strong performance of used vehicles suggests dealers should continue focusing on efficient stock turnover while maintaining appropriate margins in a competitive landscape.

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This episode of Southern Cross Dealership Report is brought to you by Drivible

Reposted from the Southern Cross Dealership Report substack with permission.

Michael Kubler