Australian Vehicles Market in 2025 keeps contracting. Sales up to May fell 2.8% while EVs dropped 20.5%. Great Wall was the standout performer, up 13.7% in a stagnant Top 10 while Kia posted the largest EV gains.
Economic Environment
Australia’s economy grew by 0.6% in Q4 2024, its fastest pace in two years, but the annual growth rate for 2024 was only 1.3%, the slowest in 32 years excluding the pandemic. The economy is expected to recover gradually in 2025, with GDP growth projected to reach around 2%, driven by rising household incomes, a rebounding housing market, and expectations of rate cuts. Inflation held steady at 2.5% in January, but trimmed mean inflation rose slightly to 2.8%, indicating persistent inflationary pressures despite easing rent prices.
The Reserve Bank of Australia (RBA) recently cut interest rates to 4.1% but is expected to proceed cautiously with further reductions due to sticky services inflation. The unemployment rate remained at 4.1% in February but is expected to rise to 4.6% in 2025 as tighter financial conditions and restrictive interest rates take effect. High unit labor costs, which have increased more than 5% year-over-year, continue to contribute to persistent inflation. The economy faces challenges from these rising labor costs, which have outpaced productivity gains and kept inflation higher than desired.
Automotive Industry Trend and Outlook
The Australian Vehicle Market continues to contract in 2025. Sales up to May dropped 2.8% to 483,840 units, following the negative trend of Q1.
Due to ongoing cost-of-living pressures, private demand is slowing down, failing to keep up with increasing supply as foreign brands are increasingly expanding their share of the country’s market, driving up competition.
Looking at cumulative data up to May 2025, brand-wise, the leader was still Toyota (+0.4%), followed by Mazda -up 1 spot- in 2nd (+1.2%), while Ford -down 1 spot- ranked 3rd (-7.3%).
In 4th place Kia (-0.4%), followed by Hyundai -up 1 spot- in 5th (+3.4%) and Mitsubishi -down 1 spot- in 6th (-12.1%).
In 7th place Great Wall climbed 4 spots (+13.7%) ahead of MG -up 1 spot- in 8th (-12.7%), Nissan -down 1 spot- in 9th (-16.9%) and Isuzu -down 3 spots- in 10th (-22%).
Looking at the top selling models, widely reported in the dedicated article, the leader was the Ford Ranger (-19.2%) followed by the Toyota RAV4 -up 1 spot- (+0.5%) and the Toyota Hilux -down 1 spot- (-12.3%).
EV Market Trend and Outlook
The Australian EV market dropped significantly up to May 2025, with a 20.5% decline and a share of only about 6% of total sales.
Australia’s EV market is underperforming compared to Europe and China, showing how more government support is needed to encourage EV adoption, which remains low despite increasing supply.
Tesla was still the leader despite losing 48.5%, followed by BYD in 2nd, up 2.5% and Kia in 3rd which reported the largest gains, up 96.7% and 2 spots.
Medium-Term Market Trend
Over the past decade, the Australian vehicle market experienced notable fluctuations. Starting with 1 million registrations in 2014, the market grew about 6.9% between 2014 and 2017 when it totaled 1.16 million sales. This growth was driven by a strong preference for SUVs, which reached a market share high around 2016.
Starting from 2018, momentum slowed down, with sales dipping to 1.153 million units. The onset of the COVID-19 pandemic in 2020 caused further downturn, with sales dropping by 13.8% to 890,000 registrations. Factors such as temporary closure of manufacturing plants and disruptions in distribution networks exacerbated the crisis.
The market began to recovery in 2021, surpassing the 1 million sales mark with a y/y growth of 15.1%. This rebound was fueled by pent-up demand and government incentives aimed at stimulating the economy. The upward trend continued, culminating in decade-high figure of 1.19 million units in 2024, with a 1.9% increase from the previous year.
The Australian EV sector has undergone significant growth. From 2014 to 2018, EV sales increased by 123%, reflecting growing consumer interest in more sustainable options. The pandemic-induced contraction in 2020 saw a 93% year-on-year growth reduction. Nevertheless, the EV market rebounded impressively in 2023, with sales more than doubling, driven by improved charging infrastructure, a broader range of affordable models, and continued government support. In 2024, EV sales stabilized around the 77k threshold, with a 2% growth from the previous year. This stability underscores the increasing consumer acceptance and demand for electric vehicles in Australia.
Tables with sales figures
In the tables below we report sales for all Brands, top 10 Groups, and top 10 Models.
