Economics 101 – Australia is an unusual automotive market. For the past few years there have been a little over one point two million new cars delivered each year.
But demand is at a plateau.
Also, over the last few years there have been a number of new brands enter the market and a lot of new models.
We have grown from around 65 brands to nearly 80 brands now. Most of the growth is from Chinese brands, focusing on electric and hybrid vehicles.
The problem is that while there are multiple new models available for electric vehicles, that segment of the market is shrinking and now less than 7% of total sales.
Also, there are a number of new brands that have introduced Utes into the market. Many of the new Utes are PHEVs or MHEVs.
Here is the economics lesson. For electric cars, increasing supply combined with decreased demand means that consumers win. Pricing must fall for brands to compete.
That plays into the new entrants’ hands as some of the established brands all have excellent EV models but no demand.
The second part of the economics lesson is that while the Ute segment is growing, the supply is also outstripping demand. That also means better pricing for consumers.
The manufacturers are tightening their belts, and some will simply not last. That brings a whole new set of issues for buyers.
Its interesting times ahead
This is a Motoring Minute
Im Rob Fraser
TO LISTEN TO THE Economics 101 – RADIO REVIEW CLICK BELOW
Radio Segments Motoring Minute
In today’s fast paced world, Listeners often want a quick update or a piece of quirky Automotive news. Listening to Motoring Minute provides that as well as the latest Automotive news and reviews.
Motoring Minute is heard around Australia every day on over 120 radio channels.
Motoring Minute has an average daily audience of over 550,000 listeners.
Listeners will find Motoring Minute syndicated through various news sites around Australia. Additionally on the Community Radio Network across Australia.
Be the first to comment