Aussies are driving away from showrooms in their new cars in record numbers as improving economic conditions, record saving levels, and COVID-19 factors stimulate unprecedented demand.
“There’s been a big increase in demand for cars stemming from the effects of the COVID-19 pandemic,” says James Dale, Team Lead – Client & Business Intelligence at carsales.
“In the most up-to-date gauge of Australian car-buying sentiment, 42% of in-market consumers on carsales are ready to buy now.”¹
Dale points to factors such as wariness of public transport, opting to add a second car to one’s household, and new work flexibility, as key drivers of this demand.
“More than half of the carsales audience polled say that flexibility in return-to-work start and finish times mean they are more likely to drive than take public transport,” he says.
“And there’s no doubt that COVID-19 flare-ups like we’ve seen in Melbourne and Sydney recently, affect consumer confidence with public transport and influence more consumers to consider commuting to work via car.”
With demand for cars strong, a number of key consumer and market factors have emerged, with implications for the wider Australian auto industry:
1. The rise of challenger brands
A host of new car brands are grabbing the attention of Australian drivers and they are rapidly converting growing awareness into sales.
Indeed, these challenger brands have grasped the unique opportunity presented by strong demand and curtailed supply. The fact that used car prices by established brands are pushing closer to prices of challenger brands’ new models, has also had an impact.
Newcomers MG, Haval, and LDV have been able to meet, and in some cases exceed, consumer expectations on technology and connectivity, affordable pricing, warranties, and aftersales support. Importantly, with the current new car supply constraints, decent stock levels have enabled them to grab market share from more established brands.
For MG, the increase in view and enquiry share on carsales has coincided with the brand breaking into the top 10 for new car sales in Australia in February, March and April. And while the brand slipped outside of the top 10 in May, the MG ZS was still the top-selling small SUV in Australia (it also leads the segment for year-to-date sales) and the MG3 continued to dominate the light hatch class.
LDV was hitting its straps thanks largely to well-priced offerings in the super-popular ute segment. Along with SUVs, this is a key market for building long term brand equity and volume Down Under.
And for Haval, despite months of growth, the best may still be yet to come thanks to the recent arrival of the highly-regarded Haval H6 2021 mid-size SUV, with pricing starting at $30,990 drive-away and hints of an expanded model range including more ‘lifestyle’ and youth-focused off-roaders.
“We now know from carsales data that more and more Australians are searching for brands like MG, Haval and LDV. It’s a testament to the brands’ ability to adapt to meet consumer needs,” says Nicholas Bailly, National Sales Director at carsales.
“For established brands, consider being highly visible among these searches to hijack consumer consideration, especially in segments where these challenger brands have top-selling vehicles.”
“Brands can also guarantee consumer consideration for their models by seeding a generic new car listing in these searches – a tried and tested, cost-effective marketing tactic.”
2. The increasing influence of content
carsales content is proudly Australian and geared towards everyday consumers across all life stages.
Crucially, the average Australian can not only understand carsales content, but they can also enjoy it, trust it, and take immediate action from it.
Indeed, in a recent onsite survey on carsales.com.au, carsales content was adjudged to be the most unbiased, most relevant, most trusted, most interesting, and most accurate, by Australian car shoppers.3
“Consumers that engage with a brand’s content on carsales are now 20x more likely to submit an enquiry on that brand compared to those that haven’t engaged,” says Bailly.
This action underlines the trust that Australians place in carsales content to help them make informed decisions.”
Bailly points to a few ways for brands to leverage the influence of carsales content.
“Amplifying editorial content widely, both on and off the carsales network, and targeting it to consumers in the early stages of their car-buying journey, when they’re most open to influence, is a cost-effective way to increase consideration and interest for your brand and models.”
3. Growing interest in Electric Vehicles
Closely monitoring growing local momentum for electric vehicles (EVs), the carsales content team has published over 130 pieces of EV reviews, news, and advice content in the first quarter of 2021—almost double the volume published in the same period of 2020, and 5x times that of 2019.²
In a sign of the pace of change, and education required to bring consumers up to speed with electrified motoring, carsales’ EV content offering has evolved to include a robust selection of easy-to-understand EV advice.
Overall, the increase in demand for EV reviews, news, and advice has seen EV-specific engagement on carsales up over 130% in the first quarter of 2021, compared to the same period in 2020.²
When consumers want to learn more about something as transformational as EVs, they head to online destinations they trust—and for car shoppers and researchers in Australia that’s carsales,” Bailly says.
The flow on from increased EV content engagement and greater interest is a notable uptick in consideration and interest for EVs for sale, with views and enquiries up 29% and 17%
respectively for brand new EVs, and 62% and 19% for used EVs.²
The recent announcements of purchase subsidies for consumers in New South Wales and Victoria, will likely accelerate EV engagement on carsales, as more consumers assess purchase options.
“Now is the time for brands to build their EV credentials. The EV market high ground is well and truly up for grabs, especially with the introduction of subsidies,” says Bailly.
“Brands can leverage existing carsales editorial EV content or take advantage of new brand integration opportunities in contextual lifestyle articles and bespoke content, to grow awareness, consideration and interest with the growing volume of EV intenders.” he concludes.
Source:
1. carsales Consumer Survey, 11–13 March, 2021
2. carsales internal data, January–March 2021 vs January–March 2020
3. carsales Loop insights community, Editorial Content survey, 8–16 April 2021, (n=847). 4carsales internal data, December 2020–February 2021.
