On face value, the cost-of-living crisis doesn’t seem to have slowed Australians’ appetite for new cars, with the midpoint of 2024 indicating a massive +9.3% growth on last year’s record new car market.
But look a little deeper and the signs of something more telling are there, perhaps not necessarily in plain sight.
Much has been written about how in general used car prices are softening a little in 2024, but mainly these declines are gradual and relatively consistent. This occurrence, however, is not necessarily applicable to all categories within the market.
Early in 2023, RedBook began to observe deviations in segment behaviours, most noteworthy being the difference between the mass market and upper premium/ luxury brands. This divergence was most evident amongst the SUV premium and Light Commercial Premium categories as can be seen below.
Source: RedBook
What is causing these premium categories to fall further than the market?
Several factors could be contributing to this, though RedBook believe some of the main triggers to be increased volume availability, substantial RRP hikes, higher interest rates and uncertain economic outlooks, impacting consumer preferences and confidence to spend up big.
Whilst this is perhaps not what many of the luxury brands want to hear, there are some high notes amongst all this. Land Rover’s Defender and Porche’s Macan are two examples that presently contradict their categories and continue to retain value in an increasingly volatile market.
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